Trading gold and silver can make you a fortune. The most effective way to trade gold, silver or other precious metals is to trade futures contract. Now, trading futures can be risky. Futures contracts move rapidly and show a lot of volatility. Traders profit from this volatility. But, if you are not comfy with threat then you can keep on trading gold and silver ETFs like the SPDR Gold Shares (GLD) or the iShares Silver Trust (SLV) and other precious metals ETFs. But the point is this that anyone can learn futures trading and profitably trade gold and silver futures contracts.
Let’s illustrate this precious metals trading technique with an example. A gold futures contract consists of one hundred ounces. Now, the margin specifications can differ from 1 broker to a different but it is usually about $five,000. This means you can handle one hundred ounces of gold with $five,000. Every point the gold futures contract moves up or down, you make $ten or shed $10. Suppose, you bought the gold futures contract and it moved up by 50 points. You make $500 less the commission and other fees).
Let’s get back to our gold trading tactic. Suppose, you invest in one particular gold futures contract that indicates one hundred ounces of gold. sell osrs gp closes up by 30 points in the subsequent few days. You are satisfied. By the finish of the week, it gains an additional 20 points. You sell your gold futures contract. So, with this one gold futures contract you have made 50 points. That implies $500. This is your initially trade in a series of 4 trades.
Now, you make your second trade by shopping for two gold contracts as the gold market is in an uptrend and you are confident that it will continue to do so for the short term. You wait for a handful of days and the contract is up by 50 points by the end of the week. You sell your two contracts and take profit of $1,000. You have just completed the second trade in your series of 4 trades.
Subsequent week you obtain 3 contracts. Rumors are flying about gold rates increasing again. You want to profit from it. This time, the contract goes up by 100 points. You sell your three contracts and recognize your profit of $three,000. This is the third trade in a series of four trades.
Suddenly gold rates drop like that did a handful of days back. You are shocked. But never worry this is the way markets perform. You wait for a couple of days and the prices once again get started climbing. You acquire 4 gold futures contracts this time. You wait a few days before the contracts each move 50 points. You sell all the 4 contracts producing a nice $two,000. This was the fourth trade in a series of 4 trades.
Your net profit is $500+$1,000+$three,000+$two,000=$six,500! Not bad! Now, you will get started all more than once again with a new series of 4 trades repeating what you did above.
You can make these four trades once more and once again beginning from scratch soon after every 4 trades. Immediately after every four trades, you remove the profit and start again little. This way, you minimize your threat of losing all your profits if the marketplace all of a sudden moves against you. This is how skilled gold traders trade and this is how you ought to trade. You will have to have observed that their is practically nothing considerably in this gold trading technique. That is what it is and that’s how you should hold it!
