Trading gold and silver can make you a fortune. The best way to trade gold, silver or other precious metals is to trade futures contract. Now, trading futures can be risky. Futures contracts move rapidly and show a lot of volatility. Traders profit from this volatility. But, if you are not comfortable with threat then you can keep on trading gold and silver ETFs like the SPDR Gold Shares (GLD) or the iShares Silver Trust (SLV) and other valuable metals ETFs. But the point is this that any person can discover futures trading and profitably trade gold and silver futures contracts.

Let’s illustrate this precious metals trading method with an example. A gold futures contract consists of 100 ounces. Now, the margin requirements can differ from one particular broker to an additional but it is usually around $five,000. This implies you can handle 100 ounces of gold with $five,000. Each and every point the gold futures contract moves up or down, you make $10 or shed $10. Suppose, you bought the gold futures contract and it moved up by 50 points. You make $500 much less the commission and other fees).

Let’s get back to our gold trading strategy. Suppose, you invest in 1 gold futures contract that indicates 100 ounces of gold. It closes up by 30 points in the next handful of days. You are content. By the finish of the week, it gains an additional 20 points. osrs skilling calc sell your gold futures contract. So, with this one particular gold futures contract you have made 50 points. That indicates $500. This is your very first trade in a series of 4 trades.

Now, you make your second trade by acquiring two gold contracts as the gold market place is in an uptrend and you are confident that it will continue to do so for the quick term. You wait for a couple of days and the contract is up by 50 points by the finish of the week. You sell your two contracts and take profit of $1,000. You have just completed the second trade in your series of four trades.

Subsequent week you obtain three contracts. Rumors are flying about gold rates rising once more. You want to profit from it. This time, the contract goes up by 100 points. You sell your 3 contracts and comprehend your profit of $three,000. This is the third trade in a series of four trades.

Abruptly gold rates drop like that did a couple of days back. You are shocked. But don’t be concerned this is the way markets operate. You wait for a few days and the rates again commence climbing. You buy four gold futures contracts this time. You wait a handful of days ahead of the contracts each move 50 points. You sell all the 4 contracts producing a nice $two,000. This was the fourth trade in a series of 4 trades.

Your net profit is $500+$1,000+$3,000+$two,000=$six,500! Not terrible! Now, you will start off all more than once more with a new series of 4 trades repeating what you did above.

You can make these 4 trades once more and once more beginning from scratch immediately after every single four trades. After each 4 trades, you take away the profit and start once again tiny. This way, you lower your threat of losing all your income if the industry abruptly moves against you. This is how professional gold traders trade and this is how you must trade. You have to have observed that their is absolutely nothing substantially in this gold trading strategy. That is what it is and that’s how you need to retain it!