Risk
Gold Risk Management
Risk per trade, daily limits, the arithmetic of drawdown recovery, and why R-based accounting is the only honest way to measure Gold results.
Gold can move twenty dollars in an hour without any headline attached. Risk management is not a defensive add-on for this instrument — it is what makes participation possible at all.
Risk per trade
A fixed fraction of equity per idea — commonly 0.5% to 1% — keeps position size proportional as the account changes. Fixed lot sizing does the opposite: it increases relative risk after losses and decreases it after wins.
Every level published by GOLD Scalper is expressed in R, where 1R is whatever you chose to risk on that trade. A result of +2.4R means the same thing to a 2,000 USD account and a 200,000 USD account.
The arithmetic of drawdown
This is why maximum drawdown is published alongside win rate on our performance page. A strategy's worst stretch tells you more about whether you can trade it than its best month does.
- A 10% drawdown requires an 11.1% gain to recover.
- A 25% drawdown requires 33.3%.
- A 50% drawdown requires 100%.
- A 70% drawdown requires 233%.
Daily and weekly limits
- Stop trading for the day after -2R. Almost every catastrophic session begins as a normal losing session.
- Reduce size by half after -5R in a week until a winning trade is recorded.
- Never add to a losing XAUUSD position. Averaging into Gold is how accounts end.
Hidden correlation
Two Gold positions taken from the same level are one position with double the size. Because we trade a single instrument, concurrent exposure has to be counted deliberately rather than assumed to be diversified.