GOLD, Gold and XAUUSD - page 146

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How I lost 56 per cent of my account when I could have almost doubled it in just two trades

 
Satan Claws #:

How I lost 56 per cent of my account when I could have almost doubled it in just two trades

With this kind of money management, it’s either your chest in the cross or your head in the bushes. (((
 
Grigori.S.B #:
With a money management strategy like that, you’ll either end up with your chest in the crosshairs or your head in the bushes. (((
The MM is correct; it’s just trading (entries/exits) based on a whim :-)
 
Satan Claws did a quick calculation out of interest: after a -56% loss, you’d need a +127% gain just to get back to your original deposit. In other words, those two trades aimed at doubling your money would now only be enough to break even.

Maxim is right that it’s all about entry points, but position size matters too. Gold easily fluctuates by tens of dollars a day. If your position is such that a $20 loss represents half your account balance, then even a correct entry will be knocked out by market noise before it has a chance to play out.

I keep it simple myself: first, set a stop based on the chart, then determine the position size from that.
Lot size = (account balance × 1–2%) / (stop loss in dollars × 100 ounces).
Deposit 1,000, risk 2% = 20 dollars, stop-loss 5 dollars → 20 / 500 = 0.04 lots.

On the other hand, a run of ten consecutive losses costs around 18 per cent of the deposit, rather than half.
 


Missed out on a profit

 

You should have seen the major support area on Gold W1, plus the end of the UNGA in New York.

Gold had a strong bullish bias from that area, so you could have aligned your strategies predominantly to the long side

You could have pointed all your strategies in a bullish direction.

Free your mind

 
TradeKalk a correct entry will be knocked out by market noise before it has a chance to pay off.

I keep it simple myself: first, a stop based on the chart, then volume relative to that.
Lot = (deposit × 1–2%) / (stop loss in dollars × 100 ounces).
Deposit 1,000, risk 2% = 20 dollars, stop loss 5 dollars → 20 / 500 = 0.04 lots.

However, a run of ten consecutive losses costs around 18 per cent of the deposit, rather than half.
Yes, this is the well-known asymmetry of trading – money goes faster than it comes in. How can you overcome it?
 
Satan Claws #:
Yes, this is the well-known asymmetry in trading – money goes out faster than it comes in. How can this be overcome?

Using Ryan Jones’s fixed-ratio method, you can significantly reduce the asymmetric effect of leverage. https://www.mql5.com/en/code/10921

Or simply use the square root of your account balance rather than the balance itself in the formula for calculating position size. In this case, if the account balance halves, the position size will not be halved but reduced by the square root of 2, i.e. by approximately 1.4 times. The fixed proportion method is a good alternative to the universally beloved Martingale and the classic fixed fraction method.

 

My gold trades for the week.

Oh dear, I’ve been so daft again


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