Is It Time for Gold Trading?
It’s time to trade gold if you find the right moment to start. In recent years it has been seen that the price of gold is better than before. this looks like volatility has returned to this market. In other words, traders will have a better chance of making money.
The majority of forex brokers offer gold trading and even monthly gold futures where both have the same basis for speculating on gold. This means whichever broker you use, the choice for gold trading might exist if you really want it.
Looks like life has returned to the gold market, let’s see if this is really the right time for gold trading ?
CURRENT GOLD TRACK RECORD
Gold gives special excitement to many people when they buy it. If that describes you, then you should try to think about gold with a little calm. Think only about price fluctuations, not the metal itself. Try to imagine you are buying or selling something boring like aluminum! Unfortunately many traders lose their logic when discussing gold and start trading emotionally rather than rationally.
Since the US dollar was completely eliminated from the gold standard in 1976, the precious metal began to float freely against the dollar. Gold has made two amazing bullish trends against the dollar. First in the late 1970s and finally in 2002-2022 when gold prices rose from $ 275 per ounce to more than $ 1,900.
Many economists believe that the function of gold as a store of alternative values for currencies such as the US dollar is entirely debt-based and will definitely increase its relative value during the period of decline in currency values as is the case today. If it’s like this, is it possible now is the right time for gold trading?
There are reliable opinions that traders can make money from the easiest market by following the trend and using tight stop losses. In forex, a method is said to work well for years when trading a USD currency pair is traded in a better price direction before 3 and 6 months when it is not contradictory.
Although gold against the dollar is often considered to be just another currency pair, it tends to move faster and stronger than the forex currency pair. We can see with the results of back tests carried out with historical data from 1998 to 2014. In tests, gold is bought or sold on a weekly basis and held for a week, depending on whether the price at weekly opening is higher or lower.
BACK TEST ANALYSIS
There are two important points revealed in this test, namely:
- Short gold is a problematic trading, statistic and momentum advantageous, irrespective of the period’s return display.
- Long gold is profitable every time you look back at the period, but the best results per trade are achieved when prices are higher than the previous 1 month, 3 months and 6 months when the momentum is very strong. This is not like a forex currency pair that tends to get excess buying when momentum is very strong.
If we apply this analysis to the current market situation regarding gold, this can be seen that now is a good time to start trading gold.
GOLD DAY TRADING
Trading gold day can be very difficult at short time frames and feels a little different from forex even though it has some similarities. The process of finding prices can be very difficult with gold, because no one really knows how many gold banks hold bullion. In addition, spreads in gold trading are relatively higher than the major forex pairs so this burden you more proportionally to trade.
So what do you think, can it be time for gold trading?