Gold Trading and Investment Guide for 2022
gold trading online has always been respected all over the world for its value and rich history. Compared to coins or other types of assets, gold has maintained its value over the years, and people use it as a way to pass their wealth from one generation to the next.
The "precious metal" tends to attract most people in times of economic uncertainty when gold is increasingly traded online.
In fact, during these times of economic turmoil, the price of gold tends to rise as investors flock to the safe haven even more.
Gold's status as a safe asset class dates back to the Bretton Woods Agreement of 1944. As the US Federal Reserve was obliged to hold gold that was equal to 40% of the value of the US dollar, the bank collected about 75% of the world's gold. For this reason, the majority of developed countries have agreed to reform their currencies against the US dollar, and this is why the dollar is the global currency in the world.
According to the World Gold Council, the United States still has the highest official amount of gold in the world at 8,133.5 tons, followed by Germany, Italy, France, Russia, China, Switzerland, Japan, the Netherlands, and India.
gold trading online method
If you want to learn how to trade gold online, or how to invest in gold, the first step is to make sure you have the right tools and products to do so:
1. Use the right broker!
For most people, buying gold bars or gold coins and storing them under the bed is not practical or safe. However, there are other ways in which you can benefit from the movement of the price of gold. One way is through the use of a product called Contracts for Difference, or Contracts for Difference.
CFDs allow traders to speculate on the price of gold and potentially profit from rising or falling prices. By trading CFDs, the trader does not own any actual gold which means that he will not have storage or security issues. With Admirals, users can speculate on the price of gold through a broker that offers the highest level of licensing, security, and safety, as well as the ability to:
- Trading and investing with a broker regulated by the Jordan Securities Commission, the Financial Conduct Authority in the United Kingdom, the Estonian Financial Supervision Authority, and the Cyprus Securities and Exchange Commission.
- Open multiple types of accounts such as a CFD trading account to buy and sell and potentially profit from rising and falling markets, as well as access to a leverage of up to 1:500. This means that you can control a large deal with a relatively small deposit.
- Access the world's fastest and most secure gold trading platform, MetaTrader, for Web, Windows, Mac, iOS, and Android platforms so you can trade on the go.
- Trade on multiple asset classes such as gold, indices, commodities, currencies, global stocks, and more.
2. Adding gold to the MetaTrader for the best gold trading platform
If you do not see the gold symbol in MetaTrader by default, you must add it by following these steps:
- Open the Market Watch
- Click the right mouse button
- Select the "Symbols" option
- Select the "Spot Metals" category.
- Click on the GOLD icon
- Press "Show" and then accept
3. Use the right gold trading strategy
The gold trading strategy helps traders analyze the price of gold for any clues about where the market might move next. Since there are many ways to analyze the market, having a list of rules is essential for continued discipline over a certain period of time. Some of the many ways to analyze gold trading price include:
Fundamental analysis: This is the study of economic data and gold market sentiment. For example, in times of economic instability, gold prices tend to rise due to its status as a safe haven asset. Advanced traders will attempt to analyze the changing world economies to try to position themselves early on a possible upward movement in the gold trading price.
Technical Analysis: It is the study of prices on trading charts to determine possible entry and exit levels. The study of the price generally comes by using the study of Japanese candlestick patterns, price movement, and technical trading indicators.
This will be explained in more detail in the Gold Trading Strategy section of the article.
As we go on to explore the factors that affect the price of gold trading and how to trade it with Admirals using a simple gold trading strategy, it may be worth opening the Admiral's trading platform to follow gold trading examples.
If you have not downloaded your trading software yet, you can download MetaTrader 5 absolutely for free by clicking on the banner below. You will also get access to a host of other benefits such as the ability to trade in other commodity markets, currencies, indices, or stocks, as well as access to a wide range of free technical trading indicators.
4. Open a position to the ade gold
Trading gold through MetaTrader is a very fast process. These are the steps to follow to place a purchase order:
- Connect to the MT5 trading platform.
- Click on the "New Order" shortcut in the toolbar at the top right of MetaTrader
- Select "Gold" in the "Symbols" field and drag it to the price chart.
- Choose your deal size in the "Lot" tab
Before trading gold, we always recommend placing a stop loss to limit the risk, and possibly take profit, to capture your profits if the price reaches its target without touching the stop loss.
To do this, you must:
- Entering the stop loss price level in the "Stop Loss" section
- should Enter the Profit price level in the Profit section
There is also the possibility of placing a stop loss and a take profit once the trade is opened, with the deal line pulled up and down.
The following is an explanation of determining the two things when trading gold on the purchase:
- If you drag the gold deal line down, the stop loss goes to the price level at which the indicator will stop
- If you drag the gold position line up, the take profit will move to the price level at which the indicator will stop
Note: For short selling, positions will be opened in the same way, but in the opposite direction, using the SELL order.
Gold Trading Methods
Of all the precious metals, the most popular option is to invest in the safe haven gold, which is generally bought as a way to diversify risk, particularly through the use of futures and derivative contracts.
The price of gold is affected by supply and demand, but unlike most raw materials, saving has a greater impact on its price than on its consumption.
Taking into account the huge amount of gold stored on the Earth's surface, compared to annual production, gold prices depend to a large extent on changes in sentiment (demand), not on changes in annual production (supply).
According to data from the World Gold Council, in recent years, annual gold production by mines has been nearly 2,500 tons. Of this amount, 2,000 tons are used in jewelry or in industrial/dental production, with the rest going to retail investors and ETFs.
The classic investment in gold bars or coins
This includes the actual purchase of gold such as gold bars, gold coins, or even jewelry. Traders will need to find other individuals who are willing to sell their pure gold, get paid to buy the full value of it, and store it in a safe place in the hope that its value will rise.
gold futures chart
A forward contract is an agreement between two parties to buy and deliver a commodity such as gold at a specific time in the future. In fact, the first futures contract was written in 1851 for commodity corn and offered through the Chicago Mercantile Exchange (CBOT).
Gold is traded at a volume of 100 ounces per contract, and with every pip moving that equates to $100. This means just buying gold futures contracts (the lowest you can in the stock exchange is one contract) and ten dollars moving in the opposite direction from you will equate to a loss of 1000 dollars and vice versa if the gold moves in the same direction you will gain 1000 dollars.
Advantages and disadvantages
- With gold futures contracts, you can trade gold almost 24 hours a day (during the trading week), while you may also be able to trade with a higher leverage.
- Futures trading also requires a large amount of capital as contract sizes tend to be quite large.
cfd trading
As we mentioned before Contracts for Difference, CFD Contracts for Difference is another way to trade gold. With CFDs, traders have the ability to trade gold contracts on the rise and fall with canal gold.
Features and disadvantages
- Use of leverage. Traders can use margin trading to control a large trade with a small deposit.
- Trade in any direction: buy or sell, and you are likely to benefit from both bullish and bearish markets.
- You can hold trades for as long as you like: with CFDs, you can trade in and out of the markets in seconds, or you can choose to hold trades for several days, weeks or months.
- However, it should be noted that CFDs are subject, to a swap fee, which is the interest charged on a transaction held overnight.
Trade gold on binary options
When you buy a gold options trading contract, it gives the buyer the right but not the obligation to buy or sell the underlying asset at a specified price.
However, gold options trading contracts expire and their value changes according to the volatility of the price of the asset and how close it is to expiration. In essence, the value of gold options trading contracts over time due to "time elapses".
When trying to trade gold options, users must have at least $2000 in their account, and a minimum of $25,000 if they want to trade gold daily on binary options, which is quite a large amount for many traders.
Gold stocks
The most common form of online gold trading is to do it indirectly by buying gold shares or in other words - shares of gold mining companies.
Trading gold online this way means that you don't have to worry about storing the physical commodity on your property or anywhere else. However, keep in mind that each method has its advantages and disadvantages.
Advantages and disadvantages
- When the price of gold rises, companies involved in the gold trade naturally benefit from increased sales, which means that the value of their stock tends to correlate positively with the price of gold.
- The downside to buying gold mining stocks is that not all of them can outperform or even match the price of the precious metal we will show the best stock market platform.
Gold ETFs
Gold ETFs are another way to indirectly invest in gold.
An ETF is an exchange-listed fund designed to track the price movement of an asset, index, or basket of stocks.
Each ETF differs in how it tracks the value of that asset; They may invest heavily in physical assets, own shares in companies linked to the industry, or do financial derivatives such as futures and options, or a combination thereof.
Advantages and disadvantages
- One of the advantages of investing in gold ETFs is that they can provide diversification in your portfolio across a number of different instruments.
- In addition, it is possible to buy precious metals ETFs that not only allow investing in gold but also other precious metals such as silver.
- However, it should be noted that buying and selling ETFs will likely incur a commission, while owning one will incur a small management fee.
- Some gold ETFs suffer from a lack of liquidity, which affects the ability to buy and sell them.
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