Trading Gold is a secure way to make money against the negative effects of economic crises. It’s true that Gold is ideal hedge for financial market risks. But still there are drawbacks that are best avoided, especially for rookies.
I am writing here some tips for new traders in Gold:
Never Buy too Much:- Gold is always supposed to be safe while value of other asset may be fall. You should hold no more than 3% of portfolio in gold. Large gold holdings provides no income and the prices can be volatile.
Have a clear understanding of strategy: You should have a clear understanding of strategy if you are going to buy gold. You should not buy trades on the basis how you feel about an asset or on advice from other traders – this will make your gold trading process very unsystematic. Create your own plan and stick to it and make profit.
Keep a journal of each trade: The person who learns from his mistakes will definitely get success. Every trader also needs to learn from his mistakes and make a plan to trade. Everytime before taking a step analyzes your previous trades and then plans your next trade to execute.
Prices are directly proportional to demand: This purely means that as the demand of gold increases at the same time price also increased. If everyone’s buying gold, you wait it out. Your profits will be much smaller if you buy it when there’s a general rush.
Limited Use of Moving Averages: Use moving averages only if they have been working for a given market in the past – if a given market has been ignoring a certain moving average, you can also ignore the one.
As we all know, everything in this world have some risk, same happens with Gold also. By learning and taking it slow will get you profit. Try out your new skills for Gold with XtreamForex Demo Account and then propose them on Live.