Gold Trading

[hakeemcfb]

Hey ,

Just wanted to see how many of you guys are trading in commodities,
Have a look @ the Gold chart and Crude chart



$1062 to $1165 in a month

Reuters 20 November 2009:

Gold rallied late on Friday in the face of a stronger dollar and ended higher for a third straight week on investor sentiment amid inflation concerns and economic uncertainty. The metal has been strong support from renewed central bank interest , buying by prominent hedge fund managers including John Paulson , and signs of simmering inflation. " People want to buy gold on breaks. Gold will hold its stability relative to other asset classes as long as there are economic uncertainty and potential inflation goin forward" said Adam Klopfenstein , senior market strategist at Lind-Waldock U.S COMEX December gold settled up $4.90 at $1146.80 an on NYMEX , December now ended higher for a sixth straight session

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Abdul Hakeem Investment Consultant 971.4.3599720 - 971.50.9808448 Century Financial Brokers LLC

[fayesloan]

Trading gold is best done using futures as I am sure hakeemcfb will tell you. Buy a kilo or 3 kg with only a 25% deposit and start trading away in the futures market.
Yes gold is going up. Thanks for the lovely graph. Investors who believe there is more upside in gold, should just go buy some gold coins or jewellery or a few bars at the bank or souq. Many years ago I decided to invest in 3 kilos of gold. Someone suggested I use the money for 3 kilos and buy 7 or 8 kgs in the futures market, because you know, gold is going up. That was when it only got started going up, but 6 months later as gold was much higher than when I had wanted to buy some, I found myself losing over 70% of my capital making 10-15 trades a day at 20 dollars per trade, spending 3-4 hours a day trying to trade gold. I found out later I wasn't the only one trying to recover my losses in a gold bull market. Some days I ended up happy making lots of money, but most days my account kept reducing.
I learned two lessons, again, of course. If something will go up for a long time then trying to trade in and out of it is pointless. You only make the broker richer. The other thing I learned, which was about trading gold futures, is that it is a very easy road to the poorhouse

[Prop]

Gold advanced more than $130 in very short time. Of course, every one understands that this is not natural. It may advance more, but it will be a bumpy ride, so watch out!

afraidtotrade.com 27 November 2009:

Along with the quick global market decline that occurred while the US was celebrating the Thanksgiving holiday, gold fell $60 into the night session, highlighting the potential risk of an overbought, overextended market. As of Friday morning, gold has regained most of those gains, but the sudden volatility was not a fun experience for most participants. Let’s see it on the overnight charts. Gold (mini-gold shown here) closed on Wednesday near the $1,190 per ounce level - all time highs. Just after midnight CST, gold began a slight decline which turned into an avalanche down to the $1,130 per ounce level but now is in the process of recovering most if not all of these losses going into the weekend. The main educational point that comes to me is that there is risk in buying grossly overextended markets at their highs, unless doing so from a breakout pattern such as a break above a resistance level or triangle/rectangle pattern. Many traders advise against “chasing” markets, and suggest that better opportunities exist on ‘pullbacks’ or retracements against a powerful up-trend. Buying grossly overextended markets can be a game of “musical chairs” where the music will stop eventually - that’s guaranteed - but the point at which it stops is unknown (and thus risky). Risk/reward relationships are difficult to assess, as are specific upside targets to play for along with logical levels to locate a stop-loss. While it looks like gold traders will shake this one off if they somehow didn’t see or stress over this overnight plunge, nice rallies like this might not always follow sharp declines in prices - especially on such unexpected news as Dubai defaulting (honestly, who saw that coming?). Be safe out there - markets seem to be very jumpy in all directions lately. Corey Rosenbloom, CMT Afraid to Trade.com

[hakeemcfb]

Gold reached its all time high of $1192.70 per ounce on the last quarter of November ,

Fayesloan suggested that trading in futures is better as you are given a leverage facility. It actually is true .
Trading of Gold even in the spot market can be done with leverage ,

Leverage:
The use of a small initial investment , credit , or borrowed funds to gain a very high return in relation to one's investment , to control a much larger investment , or to reduce one's own liability for any loss

Companies offer leverage of about 5 times to 500 times

Lets give you a very simple example

Suppose you are trading on a platform that offers a leverage of 99 times

You are interested in trading gold , A contract of gold is a hundred ounces
Per Ounce Rate : $1172.60
100 Ounces : $117260

You pay just one percent of the face value as you are using leverage

Your investment : $1172.60

When gold price goes up to $1182.60

As you have a position of a 100 ounces of gold , Your profit and losses will be calculated on the face value.

Profit Amount : $100 per ounce
Total Profit : $1000

Investors should always have a good investment amount as market corrections occur.

Keep in mind that the losses will be on the face value as well,
_________________
Abdul Hakeem Investment Consultant 971.4.3599720 - 971.50.9808448 Century Financial Brokers LLC

[fayesloan]