Trading gold and silver can make you a fortune. The best way to trade gold, silver or other valuable metals is to trade futures contract. Now, trading futures can be risky. Futures contracts move rapid and show a lot of volatility. Traders profit from this volatility. But, if you are not comfortable with risk then you can preserve on trading gold and silver ETFs like the SPDR Gold Shares (GLD) or the iShares Silver Trust (SLV) and other valuable metals ETFs. But the point is this that any person can understand futures trading and profitably trade gold and silver futures contracts.
Let’s illustrate this precious metals trading strategy with an example. A gold futures contract consists of 100 ounces. Now, the margin specifications can differ from 1 broker to a different but it is typically around $5,000. This suggests you can manage 100 ounces of gold with $five,000. Every single point the gold futures contract moves up or down, you make $10 or drop $10. Suppose, you bought the gold futures contract and it moved up by 50 points. You make $500 less the commission and other costs).
Let’s get back to our gold trading approach. Suppose, you get one gold futures contract that means 100 ounces of gold. It closes up by 30 points in the next 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 1 gold futures contract you have made 50 points. That implies $500. osrs questing services is your initial trade in a series of four trades.
Now, you make your second trade by obtaining 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 few 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.
Next week you buy three contracts. Rumors are flying about gold prices rising again. You want to profit from it. This time, the contract goes up by 100 points. You sell your three contracts and realize your profit of $3,000. This is the third trade in a series of four trades.
All of a sudden gold prices drop like that did a few days back. You are shocked. But never worry this is the way markets function. You wait for a couple of days and the rates once again start climbing. You purchase 4 gold futures contracts this time. You wait a handful of days ahead of the contracts each and every move 50 points. You sell all the four contracts creating a good $two,000. This was the fourth trade in a series of four trades.
Your net profit is $500+$1,000+$three,000+$two,000=$six,500! Not poor! Now, you will commence all more than again with a new series of four trades repeating what you did above.
You can make these 4 trades again and once again starting from scratch soon after each and every four trades. Right after each four trades, you eliminate the profit and get started once more tiny. This way, you decrease your danger of losing all your profits if the market suddenly moves against you. This is how professional gold traders trade and this is how you should trade. You have to have observed that their is practically nothing a lot in this gold trading approach. That’s what it is and that’s how you need to maintain it!