Ever thought about trading gold online? Trading has become very easy with the popularity of the internet. Gold is a safe commodity because its value remains stable even when the economy is not good or the politic of the country is in an unstable condition. Gold is often used as a hedge against inflation during times of an economy turmoil. Gold is one of the best trading assets because there are a lot of people making a large investment in gold. This has helped to increase the gold price and make it profitable for trading.
Why Trade Gold on Binary Options
Gold is a popular choice of commodity for traders who want to make money on binary options. There are always financial crisis being reported in the news for example the decreasing in the values of currencies and the unfavorable economy condition. Now is the best time to trade gold in binary options because of the unstable economy outlook around the world.
It can be expensive to invest gold in the traditional way and you also have to wait for a longer time in order to reap the profits. This means that your money will be tied up with the gold for at least a few years. Trading gold on binary options is the more affordable way because you only need to wait for a few minutes or days to reap the profits. It is safe to trade gold in binary options because you have total control on how much you want to invest. So, you know exactly how much you will lose if you fail to make the right prediction.
Before you can start trading gold, you must first sign up with a broker that offers gold as a trading asset. The majority of the brokers will offer the standard call/put options but it is best that you look for a broker that offer touch/no touch option for the gold asset. Gold is a volatile asset so you can expect a big price movement within the range of 1,000 – 10,000 pips. the price of the gold will fluctuate about 25%on the average days.
What Types of Options Allow You to Trade on Gold
You can trade gold on touch/no touch option by predicting whether the price will touch or not touch the level predetermined by the binary options broker. You will be in-the-money if your prediction occur by the time the option expires. There is the possibility of earning up to 500% when you trade gold on one touch option.
If you choose standard call/put options, you can expect to profit up to 80%. You have to take a look at a number of factors if you want your prediction result to be accurate. You will have to do research on the latest finance news and look for news such as the involvement of the central bank, prices of the energy resources, growth in the economy, demand of metal, and demand of gold jewelry.
Gold price often rise to very high when there is a high level of inflation. The increase in the price of the oil will make it expensive for mining companies to carry out mining activities on gold so you can expect the gold price to increase on this. You must check the news for political headlines such as war or economy recession as these are the time when the government will reduce the reserve of the gold and use them as currency instead.
Another type of binary option that brokers offer for trading gold is the in/out trade. In in/out trade, you predict whether the price of the gold asset will within or outside of the price range the broker has set at the end of the expiry time.
Fundamental Risks in the Market
You must pay attention to the fundamental risk if you want to succeed in trading gold. If there is financial risk in the market, the price of gold is sure to rise high. On the other hand, the price of gold is most likely to drop if there is no financial risk in the market. This is how you determine whether you should place a call or put when you are trading on the gold asset.
Money Management
The key to success in gold binary options trading is to learn the skill of money management. As a beginner, you should divide your funds to allocate a small amount in each trade instead of trading a large sum at one time. You will find that you have to lose a few times before you start to make profits, so, it is wise not to trade a large sum at the first time.
Developing Endurance and Not Easily Give Up
You must be patient and have endurance so that you won’t give up easily when you lose a trade. Boldness is necessary and you should quickly make the decision to place a trade if you feel that your prediction is going to be correct. It is important to always record down all the trades you have made including the in-the-money and out-of-money trades. In this way, you can take the necessary steps to improve your trading skills.
Using Trading Signal Software to Predict Gold Price Movement
You can rely on trading signals which will tell you whether you should place a call or put on the gold binary options. There are many binary options signal software but not all are as reliable as their sales page claim to be. You must always do research by reading reviews prior to using a trading signal software especially if it is a paid software.
It is recommended that you join two binary options signal software and compare the signals it provide. Trading signal software is suitable for advanced binary options traders who already know how to do their own research such as studying the charts, and using financial tools. If you are beginner, it is not advised that you use a trading signal software as it may not give you a desirable result. You should learn how to do technical analysis if you want to make a trade decision that help you to land on in-the-money trade.
Trading Gold Online – Conclusion
In conclusion, trading gold on binary options is highly profitable because you only need to invest a small capital to get good returns. Gold is included in the asset list of the most reputable online binary options brokers.