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 fast and show a lot of volatility. Traders profit from this volatility. But, if you are not comfortable with risk then you can hold 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 individual can learn futures trading and profitably trade gold and silver futures contracts.
Let’s illustrate this precious metals trading approach with an example. A gold futures contract consists of one hundred ounces. Now, the margin specifications can vary from a single broker to another but it is usually about $five,000. This signifies you can handle 100 ounces of gold with $five,000. Every point the gold futures contract moves up or down, you make $10 or shed $ten. Suppose, you purchased 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 buy one particular gold futures contract that signifies 100 ounces of gold. It closes up by 30 points in the subsequent couple of days. You are happy. By the end of the week, it gains one more 20 points. You sell your gold futures contract. So, with runescape casinos contract you have made 50 points. That signifies $500. This is your 1st trade in a series of 4 trades.
Now, you make your second trade by acquiring 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 couple 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 four trades.
Next week you obtain 3 contracts. Rumors are flying about gold prices increasing once more. You want to profit from it. This time, the contract goes up by 100 points. You sell your 3 contracts and comprehend your profit of $three,000. This is the third trade in a series of four trades.
Abruptly gold prices drop like that did a couple of days back. You are shocked. But do not be concerned this is the way markets function. You wait for a handful of days and the costs again start climbing. You get 4 gold futures contracts this time. You wait a few days before the contracts every move 50 points. You sell all the 4 contracts making a nice $2,000. 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 terrible! Now, you will begin all more than once again with a new series of four trades repeating what you did above.
You can make these four trades once more and once more beginning from scratch right after every 4 trades. After each and every four trades, you remove the profit and start out once again smaller. This way, you minimize your danger of losing all your earnings if the industry suddenly moves against you. This is how expert gold traders trade and this is how you need to trade. You must have observed that their is practically nothing a lot in this gold trading method. That is what it is and that is how you need to maintain it!
