Gold Trading Account Management

Best way to practice successful gold trading money management in Gold is for an investor to keep losses lower than the profits they make. This is called risk to reward ratio.

XAUUSD Account Management Methods

This method is used to increase the profitability of an investment strategy by trading only when you've the potential to make more than Three times more than what you're risking.

If you invest using a high risk reward ratio of 3:1 or more, you significantly increase your chances of becoming profitable in the long run. Gold Chart below shows you how:

In the first gold example, you can see that even if you only won 50% of your gold trade transactions in your xauusd account, you would still make a profit of $10,000.

Even if your win rate went lower to about 30% you would still end up profitable - Gold Trading Account Management Principle - Gold Trading Money Management.

Just remember that whenever you have a good risk to reward ratio, your chances of being profitable as a trader are much greater even if you have a lower win percentage for your gold trading strategy.

Never use a risk to reward ratio where you can lose more pips one gold trade than you plan to make. It doesn't make sense to risk 1,000 dollars in order to make only 100 dollars.

Because you've to win 10 times which to make the 1,000 dollars back. If you ONLY lose once you have to give back all your gold trading profits.

This type of investment strategy makes no sense & you will lose on the long term.

XAUUSD Account Management Methods

The percentage risk technique is a method where you risk the same percent of your trading account balance per transaction - Gold Trading Account Management Techniques.

Percentage risk based method says that there will be a certain percentage of your gold trading account equity balance that is at risk per trade. To calculate the percent risk per each gold trade transaction, you need to know two things, the percentage risk that you've chosen and lot size of an open gold order so as to calculate where to put the stop-loss order. Since the percent is known, we shall use it to calculate the lot size of the gold trade order to be placed in the xauusd market, this is known as position size.

Example

If you have an account balance of $50,000 in your xauusd trading account and risk percent is 2%

Then 2 % is equal to $1,000

Other factors to consider include:

• Maximum Number of Open Gold Trade Positions

A final point to consider is the maximum number of open gold trade positions that is the maximum number of xauusd trades that you want to be in at any one given time. This is another factor to decide when managing xauusd trading account capital.

If for examples, you chose a 2 %, you may also say chose to be in a maximum of 5 gold trade positions at any one given time. If you open 4 trade positions & all 4 of those positions close at a loss on the same day, then you would have an 8% decrease in your account balances that day.

• Invest Sufficient Capital

One of the worst mistakes which investors can make in gold trading is attempting to open a gold trading account without sufficient capital.

The gold trader with limited capital will be a worried investor, always looking to minimize losses beyond the point of realistic trading, but will also be frequently taken out of the gold trades before realizing any success out of their gold trading strategy.

• Exercise Discipline

Discipline is the most important thing that a trader can master to become profitable. Discipline is the ability to plan your work and work your plan.

It is the ability to give a gold trade the time to develop without hastily taking yourself out of the xauusd market simply because you're uncomfortable with risk. Discipline is also the ability to continue to stick to your gold trading plan even after you've suffered losses. Do your best to cultivate the level of discipline that's required so as to be profitable.

XAUUSD Trading Account Management Basics

Gold trading money management, is the foundation of any gold system as it helps investors to improve their chances to get profit trading on the gold market. It is especially important when transacting in the gold trading leveraged gold market, which is considered to be probably one of the more liquid financial markets among the many that are there but at the same time also a trader of the riskiest.

If you want to invest successfully in the xauusd market you should realize that it is very important to have an effective gold trading strategy of gold trading money management because you will be using gold trading leverage to place your gold orders - Gold Trading Account Management Basics.

The difference between average profits & losses should be strictly calculated, the profits on average should be more than the losses on average when trading, otherwise gold trading will not yield any profits. In this case an investor has to formulate their own gold trading account management rules, the success of each trader depends on their individual traits. Therefore, every makes his own gold trading strategy & formulates their own gold trading money management guidelines based on the above guide-lines.

When you are placing your gold orders put your stop loss orders in order to avoid huge losses. Stop loss orders can also be used to lock in profit.

Consider the chance to get profit against chance to get loss as 3:1 - this risk: reward ratio should be favorable more on the profit side.

Considering these gold trading rules and guidelines, you can use them to improve profitability of your gold strategy & try to create your own strategy that will possibly give you good profits when trading with it.