Accounts are blown in Gold Trading for 2 reasons:
1) You did not wait long enough
2) You catch too many stop losses (or just one margin call)
The whole trading community is spoiled by the articles and fake social media accounts from brokers and prop firms, who advocate one specific behaviour:
They want you to keep your trades as short as possible.
Because they are afraid of traders who trade like this:
You probably recognize elements like trade history lines from the image above. Let me explain the core idea.
Look at the gold price.
What do you see? Yes, its going up.
Will it continue going up?
YESS!
Can we simply open a 1 lot with a 10k account and wait the price to reach $5000?
NO! The dips would blow up the account.
However, the solution is so simple!
Like in a garden, we plant multiple orange trees one after another. If one dies, the others can keep growing.
But this way of trading requires different thinking:
-
We need to give up the idea that there ever will be a "one master make-me-super-rich-trade". (there is no orange tree, that carries 1000 oranges - even if the sales guy from the bazar offer you such one)
-
We still can harvest 1000 oranges. But we need to plant several trees AND let them grow for some time.
What does it have to do with trading?
Look here:
The Goal
Our goal is to bring our account into a situation where the equity is much higher than the balance (many profitable, open positions).
So if the price begins to go down and the recent trades become negative, we can still maintain a positive equity over balance while waiting for the up trend to continue.
The Strategy
-
We place one small trade (first star ⭐️ from the left)
-
If the price goes up, we add the second trade. And so on.
Now imagine the price goes down after we add the second trade.
-
At first, while the second trade will have negative PnL, the first trade will still be in profit.
-
The overal drawdown will still be positive - or least much smaller compared to the situation when we would have closed the first trade before opening the second one.
Finally, if the 4. thrade causes drawdown, there are still 3 trades that are in profit.
If using this technique, the probability of blowing up a prop firm account is super small. The biggest challenge is at the start, when we start growing and still have zero profitable open positions.
This technique requires a software to track and manage each trade individually.
In order to automate it, you can use the new product GOLD ORACLE, where this idea is successfully implemented. GOLD ORACLE licensed the tech from ai-backbone. The product targets experienced traders who value long term profitability over quick, risky gains.
If you would like to apply the idea manually, visit the free webinar. They also explain how this can be achieved manually with free tools.
