The Gold Collapse

What happened

On 11 August 2020, days after record highs above $2,000, gold dropped almost 6% in a single session.

Late buyers who chased the record were trapped: a textbook example of buying in premium.

How to survive a day like this

• Check the economic calendar and the news before you trade: these days were announced or brewing for hours.
• Reduce your risk: on extreme days, 0.5% per trade is plenty, because stops can slip far beyond where you placed them.
• Do not fight the first move. The first candles of a shock set the direction for the rest of the session more often than not.