With the price of gold hit all time highs are many traders wondering if gold trading is a great way to extra profits. One way that this can be done is by the trade of the gold futures contract. This is where you are speculating that the price of gold will rise or fall in the future. Gold historically is a great long-term investment in times of economic uncertainty or crisis. Having regard to the fact that the world is currently in a financial crisis and you have many different international tensions are flaring gold displayed why such big investment in times of great challenge.
There are many ways that you the up and down movements in the gold price can benefit. One way is to play the long side, that where you are speculating is that prices will rise in the future. Another way is to play the short side, which is when you are speculating that the prices will decrease in the future. When you are going to trade one of the different raw materials, it is important to pay attention to the tick occurs.
This is where such as futures contract is bought or shorted is reflected by a positive or a negative number down up tick tick. What you want to do is enter a position on a negative tick below if you plan on going long or a positive to tick on the short side, help you when entering the futures contract at the right time. A common strategy used to trade gold is the straddle, which is where you go long and short at the same time. The idea is to buy both commands on the same price and time frame so you can take advantage of the volatility to earn money.
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