Profitable Moves: Forex Trading And Mining Tips For Montreal’s Investors

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Profitable Moves: Forex Trading And Mining Tips For Montreal’s Investors – CFDs are complex instruments and carry a high risk of losing money quickly due to leverage. 54% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can take a high risk of losing your money.

As forex traders look for stable investments that can hedge against inflation, market volatility and other geopolitical factors, gold has become more popular than ever. Traders can use gold as a means of hedging against other investments or as a safe haven that provides consistency over time and is more resistant to dramatic changes in valuation than the majority of other currencies. Gold prices have remained relatively weak despite high global economic inflation over the past year. Many are wondering if the precious metal is still inflation-proof. What is gold trading? XAU/USD is one of several gold pairs offered by forex brokers, making it easier than ever to include gold as part of your forex trading strategy. The stability of gold prices over time makes it an important asset during periods of inflation. Following the impact of the COVID-19 pandemic on the global economy, foreign governments and savvy forex traders have shifted more of their money into gold as a hedge against losses from current inflation. Economic practices such as printing more money can weaken world currencies, reducing the value of stable assets such as gold. Gold’s stability owes much to its relatively constant global volume, which cannot be dramatically increased as governments print more paper currency. Forex vs. Gold Trading Because gold is known to be stable during volatile economic times, it is considered a favorite among traders who want to hedge against a volatile market or inflation. This means gold traders focus on long-term market trends. Meanwhile, forex traders usually focus on short-term market activity. Gold Value In terms of capital and commodities, gold is considered one of the most popular precious metals for investment. Why? Gold can help investors diversify their portfolios, which is especially important in times of economic uncertainty. Although the gold market can appear volatile at times, it has long been considered a safe haven across many countries and markets. What factors move the price of gold? What can affect the price of gold? Trade activity, economic inflation, supply and demand are the main factors that can affect gold prices. Additionally, when gold is over-mined and exceeds current demand, it can cause gold prices to fall. Investors buying and selling gold may experience short-term fluctuations in gold prices. What is Gold Futures? Futures contracts are legally binding contracts that are bought and sold on exchanges. A buyer purchases a certain quantity of goods at a predetermined price on a certain date, while the seller agrees to let the asset go under those predetermined conditions. Gold futures work like any other futures contract. They require buyers to purchase and receive a certain amount of gold at a certain price in the future, while a seller must part with that amount of gold at that time. What are the alternatives to gold? Gold options are derivatives that use gold or gold futures contracts as the underlying asset. This type of contract is an agreement between two separate parties to facilitate the prospective transaction of a specified amount of gold. Options contracts include a predetermined price, or strike price, of the precious metal along with an expiration date. Gold call options give the holder of the contract the right to buy the metal at a predetermined price before expiration, while put options give the right to sell. Learn more about gold trading benefits, gold spreads and swaps, gold technical analysis and more in this webinar! How do I start a gold business? If you’re interested in making better use of gold and capitalizing on potential profit opportunities, here are nine trading tips to keep in mind: 1. Day trade with New York in mind. Gold is an almost 24-hour market, but the highest liquidity is usually found during New York trading hours. Whether you target trades during or after New York trading hours depends on your goals. Trades during peak activity offer high liquidity and low volatility, making them good targets for safe havens. However, off-hours trading can provide the additional volatility needed to execute scalping strategies. At the same time, this additional volatility increases the relative risk of any trade. 2. Simplify analysis by targeting previous highs and lows. Since XAU/USD tends to trade in a range, one of the simplest strategies is to spot buying or selling opportunities between previous highs and lows for the trading pair. Traders can open a position on gold when it is trending up, for example, and target the previous high as their selling price or the opposite. Gold is a relatively stable asset, making it likely to reach these previous highs or lows over time. However, this is not a good strategy for day trading as it can take time to hit these targets. Range-bound strategies generally do not offer the opportunity for quick profits as momentum strategies do. Nevertheless, this is a relatively low-risk strategy designed to generate some profits from reliable XAU/USD price movements. 3. When trading gold, consider geopolitical influences on currencies. When political or economic uncertainty causes concern about currency prices, gold can be a stable safe haven that protects your liquid assets. Gold is strongly correlated with the US dollar and other stable currencies such as the Japanese yen, and opening a position with XAU/USD can be a reliable way to protect your assets from the unpredictable conditions that affect other forex markets. 4. Use equilateral triangles for analysis. Symmetrical triangles are a common chart pattern that indicate periods of consolidation that may lead to price breakouts. Symmetrical triangles show the convergence of two trend lines on the same slope but in opposite directions. As consolidation takes place, the price movement of the pairing tightens, creating a potential trading opportunity on a breakout. Most traders use symmetrical triangle patterns with other technical indicators, such as liquidity or relative strength indicators. When other indicators suggest a possible price breakout, the symmetrical triangle can add further confirmation and boost confidence in placing orders in XAU/USD. After the two trend lines converge a stop-loss order can be placed just below the descending trend line and a sell order can be issued if the price of XAU/USD successfully breaks out. 5. Track industrial and commercial demand for gold. Prices may be affected by increased demand in the gold market due to a steady global supply of the material. Demand can come in many forms. Some industries may increase their gold acquisitions due to the material’s role in consumer projects. For example, both the medical and technology industries use gold in certain products and solutions. Consumer demand for gold jewelry can also affect prices. Consider the global demand in foreign markets where gold jewelry is considered both a luxury and an investment asset. 6. Monitor central bank purchases. Central banks tend to buy gold as a hedge when they anticipate volatility in certain currencies. Recently, for example, China and Russia have made headlines for making significant investments in gold, reflecting their concerns about the future value of the US dollar and the euro, among other major global currencies. When central banks start buying large amounts of gold, it tells forex traders two things. First, governments are operating from the belief that the value of major currencies may decline, which may encourage traders to shift a greater percentage of their investments to less volatile funds. Second, increased central bank purchases usually cause gold prices to rise – at least in the short term. If the price of gold starts to rise, it can be a quick profit opportunity. 7. Track real interest rates. Gold has a well-documented relationship with real interest rates, rising in price as interest rates fall and falling in price as interest rates rise. The real interest rate is determined by subtracting the inflation rate from the nominal interest rate, resulting in a percentage gain or loss that takes inflation into account. Historically, gold prices rise when real interest rates fall below 1%. By watching these interest rates change over time, you can identify a strong buying opportunity—especially if you’re looking for long-term trading opportunities. Conversely, real interest rates above 2% likely depreciate gold. Many experts will recommend selling XAU/USD if real interest rates reach this threshold. 8. Target moving average crossover. As gold prices fluctuate within a range, they will cross various moving averages on forex charts. Many traders buy a short-term moving average whenever

Profitable Moves: Forex Trading And Mining Tips For Montreal’s Investors

Profitable Moves: Forex Trading And Mining Tips For Montreal's Investors

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