Many trading professionals will tell you that gold is very difficult to trade. This is completely true because the rules you need to respect when you trade gold are different than those when you generally trade metals. It basically took years of testing, analyzing, and using capital to figure out how to properly invest in gold. Fortunately, you now have access to all the information that you need to make smart investment choices.
If you are a beginner and gold is what you want to invest in, here are some very good trading tips that you can so easily use right now:
- Open small trading positions for gold, just as with all other precious metals. Then, when you see that you are correct, you can increase the position.
- Pay really close attention to turning points and cycles. There are many markets out there with cyclical evolutions. As an example, the USD is one of them. Short and long term trades are possible with both but the goal with gold investments is to make money in the long run.
- When you use an indicator, make sure that you check its efficiency. This helps you be protected against the unwanted situation in which you use something that was created for another asset and then used to trade gold.
- Seriously consider the use of Stochastic and RSI indicators for mining, silver, and gold stocks. They were proven to be very effective and useful in the past. You can definitely use others too, but always be sure that they are examined and that you make the trading decisions only after you are confident the indicators are good.
- Seasonally keep track of price evolution. This helps you to identify many potential entry and exit points for your trades.
- Use trend channels and trend lines. These are oftentimes really good as resistance levels for gold trading. If you use very significant highs and lows, the channel or trend you create is more beneficial for your trading.
- Do not forget about the fractal nature of markets. This helps you to figure out how much gold is going to move.
- Volume is another important factor to take into account. Unfortunately, it is oftentimes overlooked by beginner traders. It is so common to see them trade at a very high level right from the start. Generally, with gold, it is always better to start small and then keep building your portfolio.
- Usually, it is much better to wait to see breakdowns and breakouts that are confirmed before an action is taken. Based on the experience of countless gold traders of the past, three consecutive confirmations have to be seen before a trade is made.
Never underestimate how different gold is when compared to other metals you might be trading. If you use the same rules you learned in a general class in the past, there is a good possibility you will fail. Just as with cryptocurrency, the gold market evolves differently and you have to take a different approach to be successful in the long run.