How to Trade Gold Successfully – Part I
October 21st, 2009 Posted in FX Education, Oil and Precious Metals
More and more forex traders are discovering gold lately. Whilst for many years it was very clear that most of the transactions include the EUR/USD, GBP/USD and the USD/JPY pair, lately it seems that the major trading volume has shifted from the major currencies to gold. In order to help you make higher profits from your trading, here are some hints and pointers:
1. Take it easy, gold is an extremely volatile instrument. How volatile you ask? Here is a little example that will help you understand. In an average minute, the EUR/USD pair moves around 3 to 5 pips. Gold, on the other hand moves around 50 pips, per minute! So please, consider that while trading, and do not over expose yourselves.
2. When trading, make sure you do not base your strategy merely on gold. Because gold is valued in dollars, the fluctuations of the dollar have an immense impact on gold. The best way to use this influence is to follow the EUR/USD pair, as it reflects the Dollar’s strength better than any other pair. In the long-run, you’ll see a mechanic resemblance between the two.
More tips will be scattered in the next installments of this sequence of articles, make sure you check back frequently.
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Tags: Au, Commodities, commodity trading, Forex, forex tips, Forex Trading, Gold, Gold forecast, gold price, Gold trading, precious metals
