Knowing How to Trade Gold Online in the Forex Market Is Beneficial for Making Good Money in Gold Trading

Nowadays, a great number of traders choose to trade online gold for it can provide traders with potential of making good money. Trading gold online in the forex market is extremely popular among traders for they are able to enjoy the distinguishing advantages of trading in the forex market, the most liquid financial market worldwide. In order to make good money, trades need to know how to trade gold online in the forex market.

What traders need to know gold online trading?

We know that when traders are buying a currency, they are at the same time selling another currency in currency trading. To trade gold in forex market, however, both long and short positions only needs to be taken at the same time as the opposite position in the US dollar is taken. Thus, a spot gold quote (XAU/USD) can be read similarly to a forex quote; that is, the first symbol XAU represents one "troy" ounce of gold. Thus, US$1,200 XAU/USD means that one ounce of gold is equal to US$1,200. Moreover, the price of spot gold for the buyers to buy is known as "the ask price" while that for the sellers to sell is "the bid price", and the difference of ask and bid price is "the spread". In online gold trading, a trader can get a spot gold quote that reads: 1,000/1,001, which means that the spot gold can either be sold at US$1,000 or be bought at US$1,001. Therefore, a single lot of gold which equals to 10 ounces, priced at US$1,001 per ounce, can be bought for US$10,010 totally. If price of gold rises to US$1,005 per ounce or US$10,050 for 10 ounces, a trader can make US$40 (US$10,050- US$10,010). Similarly, if it goes down to US$995 or US$9,950, the trader will lose US$60(US$10,010- US$9,950).

What are the advantages of trading gold online in the forex market?

Around the clock trading

One of a major advantage of trading gold online in the forex market is around the clock trading; traders are able to trade online gold 24 hours a day during the trading day. Thus, it is very flexible for them to choose when to trade.

Accessible to high leverage

High leverage is also an important reason why a great number of traders want to know how to trade gold online in the forex market. Traders are able to enjoy different levels of leverage which can range from 50:1 to 250:1. Leverage is possible to magnify traders' profit potential in currency trading and traders are able to trade with a big amount of money with only a smaller initial deposit.

High liquidity

Liquidity is one of the most important factors to consider in trading. High liquidity market means that traders are able to buy and sell easily. The forex market is the world's largest financial market with trillions of dollars trading volume on a daily basis. Thus, traders are able to enter and exit online gold trades anytime they want to.

Make profits in both an uptrend and downtrend market

We know that gold is quoted in pair with the USD. In the forex market, traders can trade gold both in an upward market and a downward market. in other words; when traders predict that the value of gold is more likely to go down against the USD, they can choose to short the gold and long the USD at the same time and when they forecast that the value of gold tends to rise against the USD, they can choose to long the gold and short the USD simultaneously.

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