When Gold Futures Gave Me a Lesson in Position Sizing

Back in '08, when everything was still a bit hazy and the world was trying to figure itself out, I took a pretty significant long position in gold futures. Seemed like a no-brainer at the time, given the overall instability. What I failed to adequately account for, though, was the magnitude of the leverage available and, consequently, the actual capital at risk relative to my total account. The initial run-up was glorious, of course, but the subsequent pullback, which in hindsight was perfectly normal market behavior, ended up liquidating a good chunk of my gains and then some. It wasn't about being wrong on the direction long-term, it was about being drastically overleveraged for the short-term volatility. Taught me a harsh but necessary lesson on proper position sizing, especially in volatile commodities like gold.