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Gold Trading Psychology: Adding Funds Does Not Erase Losses

💡 Key takeaways

Adding funds after a drawdown can change the balance shown on screen, but it does not undo realized losses. This example separates deposits from trading results.

In the linked video, the speaker describes adding money after an account balance fell so the number on screen felt less worrying and he would not have to reduce a position immediately. He calls it a way to “trick the brain.” This is a personal anecdote, not a recommendation to deposit more money to maintain a trading position.

A deposit does not reverse a realized loss

Consider a simple example: an account starts with a deposit of 10,000 baht and then records a realized loss of 2,000 baht. The remaining cash is 8,000 baht. If another 2,000 baht is deposited, the cash balance returns to 10,000 baht, but total deposits are now 12,000 baht. In this example, the net realized loss is still 2,000 baht.

This arithmetic excludes fees, withdrawals, and open positions. It separates newly deposited money from trading performance; it is not the speaker’s account statement or a calculation of his portfolio.

Questions to consider before adding money

Balance and equity are different account figures

The MetaTrader 5 Android guide to the Trade tab describes Balance and Equity as separate account values. Equity may include the result of open positions, subject to the account’s rules.

The CFTC’s guidance on risk capital advises derivatives traders to use only money they can afford to lose without putting their financial security at risk. This is U.S. guidance; it does not replace Thai requirements or advice relevant to an individual situation.

The example is educational, not a recommendation to add funds or keep a position open. It does not show that depositing money will make it easier to control emotions. Reducing a position or taking a break may be options to consider, but neither is personal advice for a specific account.

KGK

Kanngongkanngoen Editorial Team

We create clear educational content about personal finance, investing, and debt management, with an emphasis on accuracy and transparency.