Gold trading is possibly the toughest trading market to make a profit from because it doesn’t move frequently as other commodities or the currency pairs in the market. But still one can make a profit out of this market with a proper trading strategy. In this article, we will share those golden strategies of making a profit by trading Gold.
- Know about Gold and Relationships
Gold has a correlation with other trading commodities and currency pairs. When there is uncertainty in the market with other commodities, the price of Gold is seen to be going up. Likewise when the rate of US Dollar goes down the price of Gold gets a rise. The question arises that how traders trade in such situations. The strategy is, when the currency market tends to go up the traders invest in there by mobilizing their resources from Gold and when the currency market tends to go down they just buy gold to mitigate any possibilities of losses.
- Keep your eyes on the news
Most traders trade on Gold by studying the stats, but Gold trading is not safe to trade just on the basis of statistics. There are various other factors that can impact Gold trading, such as political turmoil, economic drawdowns, global disasters, terror attack, or any other crisis.
The price of gold does not move in a predictable manner. Gold Trading on the basis of news can be successful after a major release or event. You should always keep an eye on the news platforms while you trade on gold just to be updated. We highly recommend you not to open your trade just after any event, because you never know whether the price will go up or not. You need to study the nature of the market or get an expert opinion in such situations.
3. Create and design your trading Strategies
Now that you’ve learned about the factors that influence gold trading and Gold associations, it’s time to design a trading plan. To design your trading plan, you must take time to study the market, its loopholes, probability, and possibilities. Your strategy can be both technical and fundamental, as per your choice and feasibility. You may even make a strategy by involving both.
According to the seasonal pattern-
- Gold’s price increases during the beginning of the year. So buy Gold in the month of January and the first week of February.
- March has seen to be the worst month for Gold trading. So, close your trade within the last week of February.
N:B: The above-mentioned factors in bonus tips may differ at any time. Do check the trading pattern of the market before you trade.
As Gold has its unique features, in trading you’ve to use special techniques to trade this. Do keep in mind the potential factors that may affect your Gold trading experience negatively. If you follow your strategies with back-test, you’ll certainly manage the risk factors and make a profit.