Trading gold and silver can make you a fortune. The best way to trade gold, silver or other precious 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 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 valuable metals ETFs. But the point is this that anybody can understand futures trading and profitably trade gold and silver futures contracts.
Let’s illustrate this valuable metals trading tactic with an instance. A gold futures contract consists of 100 ounces. Now, the margin needs can differ from one particular broker to one more but it is usually around $5,000. This indicates you can manage 100 ounces of gold with $5,000. Each point the gold futures contract moves up or down, you make $ten or lose $10. 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 strategy. Suppose, you acquire one particular gold futures contract that means 100 ounces of gold. It closes up by 30 points in the next couple of days. You are delighted. By the finish of the week, it gains yet another 20 points. You sell your gold futures contract. So, with this 1 gold futures contract you have made 50 points. That means $500. This is your very first trade in a series of four trades.
Now, you make your second trade by obtaining two gold contracts as the gold industry 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. buy osrs gp sell your two contracts and take profit of $1,000. You have just completed the second trade in your series of four trades.
Subsequent week you purchase 3 contracts. Rumors are flying about gold costs rising once more. You want to profit from it. This time, the contract goes up by 100 points. You sell your 3 contracts and realize your profit of $three,000. This is the third trade in a series of 4 trades.
Suddenly gold costs 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 costs once more start climbing. You purchase 4 gold futures contracts this time. You wait a few days prior to the contracts each move 50 points. You sell all the four contracts generating a nice $two,000. This was the fourth trade in a series of 4 trades.
Your net profit is $500+$1,000+$3,000+$2,000=$six,500! Not terrible! Now, you will start all over once more with a new series of 4 trades repeating what you did above.
You can make these four trades once again and once more beginning from scratch after every 4 trades. Following each 4 trades, you take away the profit and start out once more compact. This way, you minimize your risk of losing all your earnings if the industry all of a sudden moves against you. This is how professional gold traders trade and this is how you need to trade. You should have observed that their is practically nothing considerably in this gold trading approach. That’s what it is and that is how you ought to hold it!