Knowing How to Trade Gold Online in the Forex Market Is Beneficial for Making Good Money in Gold Trading

Nowadays, a great number of traders choose to trade online gold for it can provide traders with potential of making good money. Trading gold online in the forex market is extremely popular among traders for they are able to enjoy the distinguishing advantages of trading in the forex market, the most liquid financial market worldwide. In order to make good money, trades need to know how to trade gold online in the forex market.

What traders need to know gold online trading?

We know that when traders are buying a currency, they are at the same time selling another currency in currency trading. To trade gold in forex market, however, both long and short positions only needs to be taken at the same time as the opposite position in the US dollar is taken. Thus, a spot gold quote (XAU/USD) can be read similarly to a forex quote; that is, the first symbol XAU represents one "troy" ounce of gold. Thus, US$1,200 XAU/USD means that one ounce of gold is equal to US$1,200. Moreover, the price of spot gold for the buyers to buy is known as "the ask price" while that for the sellers to sell is "the bid price", and the difference of ask and bid price is "the spread". In online gold trading, a trader can get a spot gold quote that reads: 1,000/1,001, which means that the spot gold can either be sold at US$1,000 or be bought at US$1,001. Therefore, a single lot of gold which equals to 10 ounces, priced at US$1,001 per ounce, can be bought for US$10,010 totally. If price of gold rises to US$1,005 per ounce or US$10,050 for 10 ounces, a trader can make US$40 (US$10,050- US$10,010). Similarly, if it goes down to US$995 or US$9,950, the trader will lose US$60(US$10,010- US$9,950).

What are the advantages of trading gold online in the forex market?

Around the clock trading

One of a major advantage of trading gold online in the forex market is around the clock trading; traders are able to trade online gold 24 hours a day during the trading day. Thus, it is very flexible for them to choose when to trade.

Accessible to high leverage

High leverage is also an important reason why a great number of traders want to know how to trade gold online in the forex market. Traders are able to enjoy different levels of leverage which can range from 50:1 to 250:1. Leverage is possible to magnify traders' profit potential in currency trading and traders are able to trade with a big amount of money with only a smaller initial deposit.

High liquidity

Liquidity is one of the most important factors to consider in trading. High liquidity market means that traders are able to buy and sell easily. The forex market is the world's largest financial market with trillions of dollars trading volume on a daily basis. Thus, traders are able to enter and exit online gold trades anytime they want to.

Make profits in both an uptrend and downtrend market

We know that gold is quoted in pair with the USD. In the forex market, traders can trade gold both in an upward market and a downward market. in other words; when traders predict that the value of gold is more likely to go down against the USD, they can choose to short the gold and long the USD at the same time and when they forecast that the value of gold tends to rise against the USD, they can choose to long the gold and short the USD simultaneously.

http://www.ikonfx.com/forexblog/how-to-trade-gold-online/

About the Author

If you like the related forex articles,you can visit our forex blog

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Currency Trading Information:

Related Articles

6 Critical Factors For Successful Trading
Success in any profession can be broken down into a number of critical factors. Trading is no different.
Facts of Day Trading
Are you thinking of entering the fast-paced world of day trading? Arm yourselves with the information from this fact sheet on day trading.What is day trading?Day trading is an investment tactic that does online daily stock trading with a relatively short investment.
Discovering Turnaround Candidates
There are many types of investment methodology out there. All of them has their own merits.
Crisis of Confidence in the EU
The European Union (EU) constitution was dealt a double blow, first by a French "no" vote on 29-May and then by a follow on "no" from the Netherlands on 01-Jun. To add insult to injury, one low level Italian diplomat quickly called for a referendum in Italy to decide if a return to the lira was warranted.
Internet and Computer Systems in the FOREX Business
With every passing year the interest in electronic trading is bigger, more especially trading shares and currency through Internet. A new profession came forward - this of the currency dealer.
Commodity Trading - Advantages and Disadvantages
What Is Commodity Trading?Commodity futures markets allow commercial producers and commercial consumers to offset the risk of adverse future price movements in the commodities that they are selling or buying.In order to work a futures contract must be standardised.
Forex Options Market Overview
The forex options market started as an over-the-counter (OTC) financial vehicle for large banks, financial institutions and large international corporations to hedge against foreign currency exposure. Like the forex spot market, the forex options market is considered an "interbank" market.
What is Forex Trading?
Forex, or Foreign Exchange, is the simultaneous exchange of one country's currency for that of another.The way it works is an investor who wishes to purchase or sell one currency for another with the hope of making a profit when the value of the currencies change in favor of the investor.
Day Trading Success- The Key Is Survival
Most new traders tend to focus just about all their time and energy on finding nearly perfect "setups", but trade setups, even very good ones, are *not* the key to successful trading. It's the *way* you trade your setups that keeps your losses smaller than your gains.
Why Demo Account Performance Is Often Better Than Real Account Performance
Over the past several years, the popularity of online currency trading has grown substantially. Each day, online FX brokerage firms attract new investors - each of them lining up with a glint in their eye, lured in by promises of easy money.
Money Management, Part 2
FEARING LOSSESThere is a huge difference between being risk averse and fearing losses. You must hate to lose.
The Secret of Reduced Margin Spreads
One of the best kept secrets in trading is that of reduced margin spreads. You cannot name a trading method that provides more safety or a greater return on margin than does a reduced margin spread, while also being one of the least time- consuming ways to trade.
Forex Made Easy for Everyone
Forex made easy is as simple as you would want it to be. The foreign exchange market is a worldwide market and according to some estimates is almost as big as thirty times the turnover of the US Equity markets.
Business and the Forex
The business world is a complex web of supply and demand. Money and goods, physical or otherwise, pass through the global market every single day.
Dont Deny Reality
If you want to be a successful trader, you must make sure you do not deny reality in any phase of your trading. You cannot deny losses, price direction, mistakes you make, being undercapitalized, or a whole host of things you would rather not think about.
E-currency Exchange Trading
If you are reading this article you are probably one of the many people who have spent countless hours searching for unique ways to make money on the internet. Very few people have gone on to succeed and most have failed miserably time and time again.
The Basics of Forex
Foreign exchange market is also known as Forex or FX market. To date, it is the world's biggest "economic bazaar".
The Miracle of Forex
My father, who owns a small parts store and garage for vintage British sports cars, called me up recently and droned on and on about how he is getting killed by the Euro. Confused as to how the Euro could possibly be affecting his small and seemingly insignificant business, I asked him how.
The Secrets of the Super-Traders
The first and perhaps most important "secret" is to realize that your methodology or approach (no matter how good) is only part of being a highly successful trader. This applies to any trading style including, day trading, swing trading or position trading.
Where is the Market Going?
If you ask me whether the market will have moved up or down by this time next year, well I may as well flip a coin, because I don't know.If you ask me whether the market will have moved up or down by this time next month, well again, I may as well flip a coin, because I still don't know.