One of the most popular strategies for trading gold on the Forex market is intraday trading. This strategy involves buying gold at a low price, then selling it at a higher price. In this way, you can make a significant profit. However, this strategy is not suitable for everyone. It works best for traders with a large account and long-term investments. Those with limited funds should try CFDs instead.
Another way to trade gold on the Forex market is through binary options. These options are similar to Forex transactions, but they are much faster. These options are electronic contracts that have preset moments for execution. This allows the trader to earn a significant amount of money in a short amount of time. In order to profit from binary options, one must have a minimum account of $ 200.
Gold dealers typically sell gold at a higher price than the spot price. In this way, the trader’s price is higher than the seller’s price. But physical gold is still the best choice for long-term investments. It is a valuable commodity, and is highly liquid. Moreover, gold is relatively easy to convert into money.
Gold prices are affected by several factors, including news and market sentiment. Positive market sentiment means that the price will rise, and negative market sentiment means that it will fall. In the recent elections, gold prices rose by 3.1%. This was a period of great volatility in the markets, which required traders to have the right psychology to take profits. They also had to watch real-time Forex charts and news to understand the market situation.
In order to profit from trading gold, you must make sure to choose a strategy that is effective for you. The most effective gold trading strategy involves using a momentum strategy. This means that you should use a set daily trading budget, set objectives, and clear goals. A good indicator of whether the price of gold is rising or falling is when the trade crosses from down to up.
Another important factor when trading gold on Forex is the spread. A minimum spread of 0.1 pips is necessary for this type of trading. When you choose a trading platform, you should choose an ECN account with the lowest spread. A minimum deposit of 50 USD is sufficient to open a transaction with a minimum lot of 0.01. Also, you can open a demo account with no registration or verification.
In addition to currency pairs, you can also trade gold on the Forex market. A popular currency pair for this purpose is XAU/USD. The XAUUSD quote is pegged to the US dollar and represents the price of gold per ounce. The XAU/USD pair is more stable than the EUR/USD pair.