Why Do Forex and Gold Trading Always Lose Money!

Investing always carries significant risks. When you don’t know how to control risks, it’s essential to learn how to invest rationally. This is especially true in spot gold trading, where many factors must be considered to properly mitigate risks and ensure safer and more secure transactions. So, what issues should you pay attention to when trading spot gold domestically?

1. Unclear Market Trends: The market seems irrational and extremely unpredictable. In such cases, we should step back and observe quietly. There are opportunities to make money every day—no need to rush. There may be no better time to apply risk management strategies than during extreme market volatility. Risk management can prevent our accounts from sinking in a storm.

2. Handling Losses: Sometimes, we must admit we’re wrong. During high volatility, even a few minutes’ delay in closing a position can lead to greater losses. The sooner we admit the mistake, the smaller the loss. Don’t hesitate—stick to the plan.

3. Timely Profit-Taking: Some may find it ridiculous, but we must also have a strategy for handling profitable trades, which may not be as easy as imagined. We must understand that trends can reverse, and profitable trades can turn into losses. So, even with huge profits, maintain an objective attitude.

4. Prepare for Losses Before Winning: Consider whether you can withstand heavy losses. Therefore, during high volatility, reduce trading volume to avoid nervousness during market pullbacks, premature closing, and regret when the market eventually moves in the right direction.

5. Setting Stop-Losses: Normally, a smaller stop-loss means lower risk, but an excessively tight stop-loss can backfire—a random price fluctuation may trigger it. During volatile times, trades need more room, so set wider stop-losses. However, since position sizes are reduced, risks remain within planned limits.

6. Adjusting Stop-Loss Positions: Once a trade becomes profitable and the market moves favorably, move the stop-loss to breakeven as early as possible. Then, adjust it along with the trend. Even if the stop-loss is triggered later, the trade remains profitable. Of course, you can close part of the position early to lock in profits.

7. Avoid Averaging Down on Losses: After buying or selling, if the market suddenly moves sharply in the opposite direction, some may consider adding to their position—this is very dangerous. For example, if gold rallies for a while and a trader buys at a high, only for the trend to reverse sharply downward, they might try to buy more at a lower price, hoping to close both positions at a rebound to avoid losses. This approach requires extreme caution. If gold has already risen for some time, you might be buying at the "top." If you keep buying more as it falls, but the price never recovers, the result will undoubtedly be catastrophic losses. Therefore, it’s not advisable to blindly add to losing positions in gold trading, as this increases risk.

The above explains how to reduce risks in gold trading. To avoid risks in spot gold trading, investors must carefully consider every detail during transactions. Don’t let momentary negligence affect the final outcome.