Everyone is thinking to trade the Forex majors. Due to the huge popularity of the major pairs, people in Singapore often forget they have access to the CFD markets.
Trading the precision metal is much easier and can provide you a steady source of income. If you are trading the currency pairs, you know the complexities associated with the price change of the asset.
Unless you keep yourself tuned with the global news, you might lose big trades on a trend change. But if you start trading precious metals like gold, silver, etc. you are going to get a stable market.
If you manage to ride a trend, you can expect to make a big profit from a single trade. So, how can trade the precious metal like a pro? Let’s learn some amazing techniques.
3 Ways to Trade Precious Metal
1. Strong Technical Knowledge
To trade the precious metal like a pro, you must have strong technical knowledge. Weakness in the fundamental field can be compensated but without knowing the technical variables, you should not trade the precious metal.
Knowledge about trend line and Fibonacci retracement strategy can greatly help you to find the best quality trades. Since the precious metal tends to respect the trend, you have to master the trend trading technique.
And to master this technique, you can’t afford to have weakness in your technical knowledge. Learn all the details of your trading platform so that you can use the advanced tools and make the best decision to trade the major trend.
2. Ability to Use the Leverage
Making some serious profit requires an understanding of the leverage. Most of the time, the traders get extreme leverage while dealing with the currency pairs. But switching to the CFD market significantly reduces your leverage. So, before you place any trade, make sure you know the maximum leverage offered to trade a certain asset.
Many people often get margin calls since they don’t understand the concept of leverage. You might have 1:100 leverage to trade Forex majors but in metals, the leverage can be as low as 1:5.
The leverage factors greatly depend on the brokerage firm. Before you start trading the precious metal, learn more about the leverage to become better at trading.
3. Develop a Trading Strategy
The traditional approach used to trade the Forex majors is not going to work. To trade the precious metal you have to think differently.
For instance, fundamental factors affecting the price of gold, silver, and other precious metal should be considered. If you try to trade the gold during the U.S interest rate decision, you are making a big mistake.
Since the price of gold is measured in the U.S dollar slight in the interest change will bring high volatility. So, try to create conservative trading to trade the gold. Open a demo account see how the strategy performs at the different market conditions.
Are you ready to lose?
Being a precious metal trader, you have to be ready to lose trades at any moment. Even the most obvious signal is will result in loss. So, why should we trade gold or precious metals?
The answer lies within the price stability. Compare the price movement of the precious metal with currency pairs. You will notice a huge difference. Most of the time, precious metals respect the key support and resistance level. And by using the simple trading strategy, you can expect consistent profit.
By seeing the success, some of you get biased and start taking excessive risk and forget to accept the losing orders. Thus a few losing orders make you frustrated and cost you a fortune. So, never get emotional while trading the gold. Stick to the basic details of the market and try to improve your trading skills over the period.
Stop looking for any shortcut as it never works. Stay in touch with successful traders as they can teach you many new things.
Author: Jessica Davison