XAUUSD Trading Account Management
Process below describes the process of formulating gold trading money management and practical advices on formulating your own gold trading money management system in Gold Trading - gold trading account management.
1. Keep the Necessary reserve (over and above the broker margin requirement)
This reserve is needed for unusual situations and it should be not less than 50% of invested equity. It is the first rule of gold trading account management in margin definition for opening gold orders. However, many experts & analysts advice more reserve of about 70 % - 90 % of invested gold trading account capital for safe operation in xauusd trading.
2. Do not to invest more than 2%-6%
This is one of the principle that helps to avoid bankruptcy: never invest more that 2% on one market and do not to invest more than 6% in the total open xauusd trades.
3. Never risk a loss of more than 2% of invested money on any single trade
This isn't the same as above, the above is never invest more than 5% , this is never to lose more than 2% on a single trade. In this case a trader risks only lose small part of his equity with an unprofitable order.
4. Diversify
Use optimal investment of your funds is that you should diversify to some degree. Just In case one trade losses, the order can be covered by profits of another trade.
5. Xauusd trading money management guidelines should be well written down
On a piece of paper or better still in your trading plan. If you open orders then this trading orders should be within your gold trading money management guidelines.
6. Define your stop loss and take profit levels
When you are trading put your stop gold orders in order to avoid any huge losses or even bankruptcy. Profit taking levels will ensure you get additional profit by taking money out of the gold trading market. Analyze the situation and predict the future movement of xauusd price action and place orders accordingly. You can even use indicators and volatility of the xauusd price to know where to place these orders.
7. Define of possible loss or profit before executing a trade
Consider only opening xauusd trades when you have the chance to get profit against loss ratio of 3:1. If you cannot do it then don't open the order.
Gold trading money management should seek to bring maximum profit to the traders account, keeping profitable orders as long as possible is a good strategy. Therefore, if you make some profitable orders you can have goods results.
8. Try to follow the rules of opening and closing the xauusd orders specified in your plan.
That way you'll get consistent trading results required for making profits in gold market.
9. Do not revenge against the xauusd market
In this case, you'll not be interpreting the situation but you will just be trading based on emotions & you'll lose more money.
10. Timely rest
Don't trade when you are exhausted, no matter how tempting the situation might seem, you might not get the profits that you can if you were to trade based on your gold trading schedule.
Considering these - Gold Trading Account Management Rules and Guidelines can make you trade profitably. Try to develop your own gold trading money management strategy that gives you good profits.
