How To Trade Gold

In trading gold online a trader can either buy or sell gold contracts so as to earn profits.

A trader will buy gold if they think that the value of xauusd will appreciate in value against the US dollar or they can sell gold if they think the price of xauusd will depreciate against the dollar.

Buy Trade - Going Long

When the gold prices are heading up, then traders will buy gold. This also is referred to as going long. Going long is another term for buying.

Gold Trading Buy Trade and Gold Trading Sell Trade - What is XAUUSD Buy Trade? - What is XAUUSD Sell Trade?

In the trade above when prices of gold are moving up, a trader will open a buy trade as is shown above. This is known as going long - a gold trader will hold this open buy trade as long as the prices continue heading in this upward direction.

The price of gold will continue moving upwards as long as both MAs are pointing upwards. The two moving averages are used to show the direction of the prices - what is commonly referred to as the trend. The method of using of two moving averages is known as moving average cross over strategy. A shorter moving average & a longer MA for example the 5 period moving average MA and 7 period moving averages MAs are used together to come up with the above system of determining the overall direction of gold prices. At any one time these moving averages will either be moving in an upwards direction or a downward direction - at other times when the market prices are consolidating, the moving averages will move sideways showing that prices are neither moving upwards or downwards.

Sell Trade - Go Short

When the xauusd prices are heading down, then traders will sell gold. This also is referred to as going short. Going short is another term for selling.

Learn How To Trade Gold - How To Trade XAUUSD Online

In the above trade the gold prices are heading downwards as displayed by the two moving averages that are both moving downwards. A trader would open a sell trade and this is known as going short. The trader will then keep their short trade open as long as the prices continue heading downward.

Gold Charts

Now that as trader you know when to buy and when to sell gold, the question is how to sell or where to place the buy or sell trade.To do this a trader will use the gold charts provided. A xauusd chart will represent the movement of gold prices & draw this using a graphical format which can be used by technical traders to analyze the gold price movement.

Learn How To Trade XAUUSD - How To Trade Gold Online

The above xauusd/gold chart which is the daily trading chart shows the upwards movement of gold prices from $1048 per ounce to $1267 dollars per ounce from November 2015 - February 2016.

The price is shown by the vertical axis that has price markings and the date is illustrated by the horizontal axis that has date & time markings.The price of XAUUSD & its movement is represented in the format of a chart. The chart shows an upwards movement of the price. Traders who are trading xauusd will analyze this price movement to know which direction to trade. In the chart example above because prices are moving upwards a gold trader would buy the xauusd and go long.

One can open a buy or sell trade position directly from this chart. By right clicking anywhere on the chart a menu will appear and the online trader can choose & select the open a new order option and open a trade.

Calculating Profit

When trading xauusd profit is calculated using the price movement - the difference between where a gold trader opens a trade and where they close the trade will be used in calculating the profit.

In the above example where xauusd prices moved from $1048 per ounce to $1267 dollars per ounce, if a trader opened a buy trade at $1060 dollars per ounce and closed the trade at $1260 per ounce, the price difference would be $200.

Because gold is traded in lots of 100 ounces, then trading one lot of gold will mean that for every one dollar move per ounce the trader makes $100 dollars because they will not be trading a single ounce but they will be trading 1 lot of xauusd which is equal to 1 hundred0 ounces of gold. Hence, it means the $1 dollar per ounce move will be multiplied by 100.

This means that is a trader had bought 1 lot of xauusd at $1060 per ounce and closed the trade at $1260 dollars per ounce, where the price difference would be $200 dollars. Then $200 dollars difference multiplied by $100 profit per $1 dollars move, then this would mean the online trader would have made $20,000 in profit from this trade position.

To buy one lot of gold which is equivalent to 1 hundred0 ounces- at the price of $1050 dollars per ounce a xauusd trader would need to have trading capital of $105,000 ($1050 dollars price per 1 ounce multiplied by 100 ounces). Because not very many retail traders can afford that amount of money - gold brokers provide leverage, which means the traders can trade using borrowed capital. With the default leverage of 100:1 it means that traders can borrow 100 times their trading capital which means to open a one lot of gold traders will only need to deposit $1050 dollars in their account and they can now open one lot of gold - the $1050 multiplied by 100 times which is the leverage of 100:1 is equal to "$105,000" which is the amount of capital that a trader will control after using leverage.

XAU/USD Platform Software

The gold price charts can be accessed from the xauusd platform provided by gold trading brokers. The platform is the trading platform that traders will use to connect to their brokers and place trades in the online gold market.

The platform will draw the price charts for the online trader. The platform also will calculate the profit and losses from the trades opened by the trader & the trader does not need to calculate trading profits, the profits are calculated mechanically.

The trading platform software can be downloaded from the gold broker's website and traders can learn how to use this software platform using a practice demo account.

Demo Demo Account

Demo practice trade account is a practice account which traders use to learn the trading platform & how to open and close trades without the need to of investing their own money. The money used on this account is virtual and traders can practice trading with the virtual funds until they learn enough about xauusd trading. Once traders gain enough knowledge and experience to help them make profits then the online traders then can decide to open a real gold account & begin trading xauusd online.

Live XAUUSD Account

The live gold trading account is the account used by traders to trade xauusd/gold in the online trading market. This account a gold trader will trade with real money, a trader will be required to make a deposit in to this account & after that the online traders can place gold trade positions in the market through this account and the profit or loss they make will be credited to this account.

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