How To Trade Gold

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

A trader will buy gold if they think that the value of xauusd will appreciate against the 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 name 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 illustrated above. This is known as going long - a gold trader will hold this buy trade as long as 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 trading 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 xauusd 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 - Going 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 name for selling.

Learn How To Trade Gold - How To Trade XAUUSD Online

In the above trade the gold prices are moving downward 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 prices continue heading downwards.

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

The price is shown by the vertical axis that has price markings and the date is shown 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 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.

A trader 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 trader can choose the open a new order option and open a trade.

Calculating Profit

When trading xauusd profit is calculated from the price movement - the difference between where a gold trader opens a trade and where they close the trade will be used to calculate 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 everyone dollar move per ounce the trader makes $100 dollars because they won't be trading a single ounce but they will be trading 1 lot of xauusd which is equal to 100 ounces of gold. Hence, it means the $1 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 trader would have made $20,000 in profit from this trade transaction.

To buy one lot of gold which is equivalent to 100 ounces- at the price of $1050 dollars per ounce a xauusd trader would need to have capital of $105,000 ($1050 dollars price per ounce multiplied by 100 ounces). Because not very many retail traders can afford that amount of money - gold trading brokers provide leverage, which means 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 trading platform provided by gold trading brokers. The trading platform is the trading platform that traders will use to connect to their brokers and place trades in the online gold trading market.

The platform will draw the price charts for the trader. The platform also will calculate the profit and losses from the trades opened by the trader & the trader doesn't need to calculate profits, the profits are calculated automatically.

The trading platform can be downloaded from the gold broker's web site 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 trading account that traders use to learn about 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 traders then can decide to open a real gold trading account & begin trading xauusd online.

Live XAUUSD Account

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

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