Gold has been one of the original means of prosperity and exchange for many years. If you have trading experience and plan to trade gold, be aware that the broker you choose and the trading platform you select can have a major impact on your potential earnings. Here is a step by step guide on how to trade gold online:
Step 1: To Trade Gold Outline Your Objectives
Think of a basic investment or trading plan and recognize why you need to trade in the gold market.
Choose if you want the gold like commercial insurance through possessing the metal physically. You may also choose to have it as an asset deal or use market movements to make profitable exchanges. In this way, you will find the best way to capitalize on gold.
Step 2: Work out a Trading Strategy
After you have defined your objectives, develop a feasible strategy for your requirements.
Trading strategy assists traders to analyze the gold price for clues as to where the market might go next. Because there are numerous ways to analyze a market, a list of rules is vital to be disciplined continuously for some time.
Some of the gold analysis methods include:
- Fundamental analysis – This refers to the study of sentiment related to the gold market and economic data. For instance, in spells of economic uncertainty, the prices of gold rise because of their condition as a safe haven. Advanced traders try to analyze changes in the global economy to position themselves from the start on a possible higher movement in the gold price.
- Technical analysis – This refers to the price study to determine the possible exit and entry levels. The price study comes down to the use of gold charts, technical trading pointers, and price action.
Also, consider coming up with a strategy to analyze and calculate the currency correlation. Here are 4 gold correlated currencies you should consider:
Note that purchasing physical gold or buying gold to save doesn’t require much strategy. In general, just wait for a deal from the gold market and buy the amount you want to invest in.
Step 3: Choose a Gold Broker
After you have defined your goals and developed a suitable strategy to achieve them, find the best online broker for your necessities and test the trading plan on a demo account. In case you plan to invest and own physical gold, go for gold bullion or coins from a specialist gold metal dealer.
Step 4: Back Test A Trade Gold Strategy
After developing a viable trading method, and choosing a broker, test your strategy with historical data. In case your strategy works when testing past data, open an account with the brokerage of your choice to see if your strategy works in a real-time exchange situation.
The ideally chosen online broker has a trading platform with which you can access past data and test your strategies on a demo account. It also has gold trading tools that you require. For instance, the common Meta-Trader platform contains a convenient back-testing function.
If you’re having trouble developing your trading plan, study other people’s proposals and follow a similar system. You can also build your plan with the other method as your fundamental strategy. Gold trading without an action plan is identical to navigating without a map or compass. It is one of the key reasons that most operators lose cash. You may also search social commerce to copy the trades of a more experienced trader.
Gold is among the original products traded in the markets. This is the reason why most gold traders may opt to use long term and medium trend strategies to trade gold. Ultimately, your trading strategy determines the time frame for your trading and can affect your broker selection.
Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.
Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved.