Carrying over a forex lot size
The first and most expensive. Somebody who risks 0.5 lots on EUR/USD opens 0.5 lots on gold, where each point costs more and the stop is five times further away, and takes a loss several times larger than they intended on the very first trade. Work the size out fresh, every time, from the stop in front of you.
A stop that is too close
The second. Placed at a distance that would be sensible on a currency pair, the stop sits inside gold’s ordinary movement and gets taken out by noise on trades whose idea was correct. Two or three of those in a row produce a trader who concludes their analysis is broken when the only broken thing was the distance.
Trading the release itself
Gold moves violently on the American inflation and jobs numbers, and every part of that moment is against a retail trader: the spread is at its widest, slippage is real, and the first move frequently reverses within minutes. Being flat through the release and trading the level it leaves behind is not caution, it is the only version with a stop that means anything.
Revenge, at gold speed
Because the moves are large, the urge to make a loss back is larger, and the market obliges by offering another apparently obvious setup within minutes. A daily loss limit exists precisely for this instrument. Losing three trades in an hour is possible here in a way it is not on a slow pair.
Believing the story instead of the chart
There is always a compelling macro reason for gold to go up. There is usually an equally compelling one for it to go down, published the same week. A position taken on a story has no level to be wrong at, so it cannot be sized and cannot be exited except by feeling. Let the story lean you; let the chart decide.
In short
| Mistake one | A lot size carried over from forex |
|---|---|
| Mistake two | A stop inside the ordinary range |
| Mistake three | Trading the release itself |
| Mistake four | Revenge, with a daily limit unwritten |
| Mistake five | A position built on a story, with no level |
Common questions
Why do I keep getting stopped out on gold?
Almost always a stop placed at a forex distance. Gold’s ordinary movement is larger, so the same number of points is noise here and a level there.
Should I trade gold during NFP or CPI?
Being flat through it and trading what it leaves behind is the version with a real stop. The release itself gives you the widest spread of the week and a first move that often reverses.
Is gold rigged against retail traders?
No, but it is unforgiving of habits imported from slower instruments. Almost every story of gold behaving impossibly turns out, on inspection, to be a position that was too large.
Trading forex and CFDs on margin carries a high level of risk. Most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade.