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 rapid and show a lot of volatility. Traders profit from this volatility. But, if you are not comfy with danger then you can retain 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 any individual can study futures trading and profitably trade gold and silver futures contracts.
Let’s illustrate this precious metals trading tactic with an instance. 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 around $five,000. This means you can control one hundred ounces of gold with $5,000. Every point the gold futures contract moves up or down, you make $ten or shed $10. Suppose, you purchased the gold futures contract and it moved up by 50 points. You make $500 significantly less the commission and other fees).
Let’s get back to our gold trading method. Suppose, you obtain one gold futures contract that implies 100 ounces of gold. It closes up by 30 points in the subsequent handful of days. You are happy. By the end of the week, it gains a further 20 points. You sell your gold futures contract. So, with this one particular gold futures contract you have made 50 points. That signifies $500. This is your initially trade in a series of 4 trades.
Now, you make your second trade by buying two gold contracts as the gold industry is in an uptrend and you are confident that it will continue to do so for the brief 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 4 trades.
Subsequent week you purchase 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 3 contracts and understand your profit of $three,000. buy rs3 gp is the third trade in a series of four trades.
Suddenly gold prices drop like that did a handful of days back. You are shocked. But never be concerned this is the way markets function. You wait for a handful of days and the costs again get started climbing. You purchase four gold futures contracts this time. You wait a handful of days prior to the contracts each and every move 50 points. You sell all the four contracts generating a good $2,000. This was the fourth trade in a series of four trades.
Your net profit is $500+$1,000+$3,000+$two,000=$6,500! Not terrible! Now, you will commence all more than once more with a new series of 4 trades repeating what you did above.
You can make these 4 trades once more and again starting from scratch right after each 4 trades. Just after each and every four trades, you remove the profit and start out again little. This way, you cut down your threat of losing all your income if the industry abruptly moves against you. This is how qualified gold traders trade and this is how you must trade. You should have observed that their is nothing significantly in this gold trading method. That’s what it is and that’s how you really should maintain it!