Looking at the facts, you may now start to be interested in diverting your funds from forex trade gold trading. But keep in mind that the way trade gold has a slight difference compared to forex trading. In this article, we will explore how to learn to trade gold in four steps. Without delaying any longer, here’s the first step:
1. Know what drives the price of gold Unlike forex, the price of gold has its own factors that make it experience an increase or decrease. But some investment experts say that there are three things that affect fluctuations in gold prices. These three things are : Inflation & deflation Fear & greed Demand & availability of goods
Many people attribute fear as a determining factor in the significant rise in gold prices. This is not wrong, but fear, as is now the case due to the rising political temperature in North Korea, can only raise the price of gold in a short period of time. As North Korea’s political temperature eases or no further action from North Korea or the United States escapes last week’s ballistic missile launch, gold prices will gradually fall as fear gradually subsides.
On the other hand, inflation or deflation can move the price of gold over a longer period of time. For those of you who invest your funds in the form of physical gold such as jewelry or gold bullion may feel the impact of inflation on the price of gold than when you invest in gold online in the short term. Inflation will be able to push the price of gold to continue to rise over time.
2. Understand the players Just like the forex market, the online gold market also has big players in it. But in contrast to the forex market where big players are almost impossible to move a very large forex market of its size, big players in the online gold market have the ability to move prices with the transactions they make. These big players usually collect a very large amount of physical gold, also in the form of stocks and online gold trading.
As a retail trader, the step we can do is to read the steps taken by these big players and follow the trends that occur. In the forex market, you may still profit by bucking the trend using certain techniques, but that is not the case in online gold trading. Only by following trends can you benefit from online gold trading, not by fighting the movements of big players.
3. Learn trends that have already occurred Unlike the forex market which is always changing from time to time, trends that occur in the gold market sometimes repeat themselves several times. This is because the factors that can affect the increase in gold prices are significantly limited. You only need to pay attention to when the trend occurs and what factors influence the increase or decrease in prices.
It is recommended to increase the time frame up to 100 years back to see what happened in that period. Note what events make the price of gold soar or fall sharply. For example, a fairly high increase occurred from 1970 to 1980 due to inflation that occurred in connection with the increase in world crude oil prices, then fell again in the period 1980 – 1990 due to financial policy from the Central Bank of the United States.
4. Choose the right investment land There are many ways you can invest in gold. You can invest in gold in physical form, such as buying gold bullion. But this way of investing can not be ascertained when you will benefit when you resell gold bullion that you have bought. This is because not necessarily tomorrow the price will go up. Although it goes up, sometimes the price increase that occurs is not significant and you can only get a small profit. That’s why this way of investing is suitable for those of you who choose long-term investments.
The second way is to invest in gold online. The advantage of this second way is that you can cash out your profits whenever you want and the profits you get also vary according to the leverage and the number of lots used. This type of gold investment is suitable for those of you who do not want to wait too long to get a profit, because it is the most suitable online investment for short-term gold trading.
That’s how to learn to trade gold in four steps. If you are a beginner gold trader, these 4 steps can be a benchmark for you to determine the steps you take when trading. I hope this article helps and is happy trading!