Gold Trading

http://profitabletradingtips.com/trading-investing/gold-trading Gold Trading By www.ProfitableTradingTips.com Gold trading was popular in the days when both the Euro and US dollar were in jeopardy. Gold passed $1,800 an ounce and Bank of America Merrill Lynch raised its twelve month target price to $2,000. Remember that gold ended in 1990 at a little over $200 an ounce! Also remember that gold peaked at over $600 an ounce in 1980, fell precipitously, and then went into hibernation for two decades. Gold trading, like trading other commodities, trading stocks, or trading derivatives such as futures and options contracts requires both fundamental and technical analysis to succeed. Although true gold bugs will say that gold is the best and only investment a look at gold prices tables over the years, shows us that gold advances and gold declines. It is with fundamental analysis of the factors that drive gold prices that traders can anticipate long term gold price movement. It is with technical analysis tools such as Candlestick analysis that gold trading in the short term can become profitable. Timing is All When Gold Trading Although buying gold bullion in 2000 and holding it until now would have been profitable there is more to investing in and Gold trading. Gold investing and gold trading can take a number of forms. Gold futures are traded on the COMEX, the commodity division of the New York Mercantile Exchange, NYMEX. Traders can profit from buying or selling futures directly and they can profit from buying or selling options on gold futures contracts. When gold passed $1,700 an ounce and closed in on $1,800 an ounce COMEX gold futures trading was active. In trading futures on gold bullion it is rare for traders to hold their contract until expiration. Traders rarely if ever deliver or take delivery of physical gold. Rather they exit their futures contract on or before the end of the contract period by executing the opposite trade, hopefully with a profit. Other Options When Gold Trading Gold exchange traded funds, ETF, are another possibilities for gold trading. The value of the ETF tracks the value of gold bullion. Gold ETF shares trade like stocks. Traders can use Candlestick patterns to follow ETF prices as they would use Candlestick stock charts to follow ordinary stocks. As with ordinary stocks traders can profit by buying options or selling options on Gold ETF. A means of leveraging capital in Gold Trading is buying stocks and selling stocks of gold mining companies. Gold stocks commonly rise faster than the price of gold in a rising market. They also fall faster in a falling market. Gold Options Trading Options trading provides both leverage and management of investment risk in Gold Trading. Buying puts or buying calls on gold futures, ETF, or mining stocks limits investment risk to the price of the options contract. Of course options writers, commonly limited to large investment houses, can sustain substantial losses, which is why the business of writing options is often limited to large institutional traders with very deep pockets. When Gold Trading Is Profitable When US interest rates were near zero and a solution to dealing with the monumental US debt was not in sight gold trading was in vogue. But smart traders know that at the top of the curve is not necessarily the best place or time to make money in trading. For many, the shine has gone off of gold trading as the price has fallen by a quarter of its former value. Smart traders know that gold can still go down and it can still go up and they trade accordingly. http://youtu.be/i6CZL6ZB8p8

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