Risk and Planning

Module 12 — Basic Risk Management for Gold

The rules are the same as any market; the numbers are larger.

Fix your risk per trade as a small percentage of the account.
Place the stop where the idea fails, allowing for gold's normal overshoot.
Convert that stop distance into money using your broker's actual contract specification.
Reduce the position size until the money risk matches your fixed percentage.
Account for the wider spread before deciding the trade is worth taking.

If correct sizing produces a position that feels too small to be interesting, the account is too small for that stop distance. That is information, not an obstacle to work around.

Key concepts

Fix account risk first
Stops follow structure
Size absorbs volatility

Practical example

A structurally valid wide stop leads to a smaller gold position, not a tighter arbitrary stop.

Common mistake

Moving the stop closer only to permit a larger position.

Knowledge check

Check your understanding

1. Which statement best captures basic risk management for gold?

Let structure set the stop and risk set the size.Moving the stop closer only to permit a larger position.The outcome is guaranteed when the pattern appears.Context and risk can be ignored.

2. Which action best reflects the disciplined approach from this lesson?

Let structure set the stop and risk set the size.Moving the stop closer only to permit a larger position.Act first and review the context afterwards.Increase exposure when uncertain.

Reading is free.Create a free accountto save your progress and continue where you stopped.

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