article 16.01

Don’t Give Up on Gold Just Yet

Industrial metals and commodities shares have been dropping in recent times according to some recent market statistics. Most importantly is Gold which has seen a drop in not seen since early 2000s. As at today, most people have turned away from gold and investing in gold is now termed a fools investment owing to the all time low drop in prices of gold. However, even though, gold is down at the moment, there are people who think there is an opportunity to invest in it as there is a certainty that the values of gold will rise again.

Since the month of March, the price of Gold seems to have been dropping continuously even as the US dollar keeps appreciating. In fact, it now looks like any increase in the interstate rate in the US strengthens the US dollar leading to more fund drainage from metals and commodities.

It shouldn’t really be a surprise about what is happening to gold at the moment. It is has been known that the US Dollar and gold have always been at the opposite end therefore the dropping the price of gold just signifies the strength of the US currency which has opened up opportunities for trading as against trading in commodities.

There are several reasons for this slump. In the first place, there seem to be an overestimation of the amount of gold that is held by China. Unfortunately, the size of 6 million tons is not really enough as expected and the knowledge of this situation is what has plunged the price of gold. Besides, another top gold demanding country which is India decreased their demand for gold last year and this also contributed to what gold is experiencing at the moment.

The value of gold has kept decreasing despite the major holidays which normally increase the need for gold in India and China. Also, the Greek situation has also played a part as uncertainty of the Euro paved way for the Dollar to rise as more and more investors shifted their currency holding to the dollar.
There is a belief that gold will bounce back real soon even though it currently stands at 1.3% to 96. For example, investors are still advised to hold off their gold for a little longer until the rate begins to find their normal placement.

It is important to note that despite all these, gold is still regarded as a “safe haven” especially for long term investors as a hedge against recession and inflation. Gold remains the only way wealth has been measured from generations to generations despite crash in global economy at some point. It is not being used in our daily transactions but its importance to the global economy cannot be over emphasized.
However, it is envisaged that a time will come when investors will not just look at buying the market gold but also start buying the physical gold as a long term investment. Should it get to this point, it is certain that gold prices will hit the roof again.



WB2017051                                                                                                                                                                                                                                                                                  Publisted 16/01/17




Mistakes are bound to happen and that is why this article is important so as to learn how to avoid mistakes. However, it is important to note that this article is not written just to “entertain” you but to offer some tips.

Trading forex CFDs requires you to do what is best not necessarily what you think is good. It is not necessarily a case of being “fortunate” where you hit it big or go bankrupt. In this case, you will either hit it big if you work with a good mindset or you will go home all the same.

Use Wider Stop Losses

One irresponsible mistake most people make when it comes to stop losses is fixing a stop loss within the market daily range. Even though this may look like a wonderful idea but the reality is that it is a recipe for failure. Note that stop losses requires a wider margin so placing it at what you think looks best may be throwing away money unnecessarily.

Note that the thing keeping most people from following this simple rule is because they fear that their position size may be reduced. However, it is important to understand that this is in no way a bad idea because you have to look at forex CFDs trading as a game of logics rather than a game of chance.

Adopting a wider stop loss should not be seen as killing your game because at this point, you need to realize that reputation is the key. Therefore, the best thing has always been placing trade with a wider stop loss and not getting too emotional.

Adopt Fewer and Longer Trade

This is also another way to create a winning formula when trading. Instead of placing trades over and over, it is advisable to hold on to some bigger offers for a longer period.

Do not forget that each trade will involve you paying a broker fee. This means that the more broker fees you pay, the more you continually eat into your fund.

One problem with traders is that they begin to over trade when it looks like they have found a winning formula. To be realistic, trading does not really go that way and any trader who thinks in that way is setting himself or herself up for failure.

The best offers may not present itself to you so easily, you need to apply some patience and wait for it to come.
So in the end, forex CFDs trading is not really about how much trade you have placed but how much profit you have made. So if one big trade give you profit but does not come often, it is still better than many trades that keep fluctuating and messing up your trading record.

Patience is What You Need

There is no doubt that patience is the key and this is what traders should have at the back of their minds. Applying the right strategy and patience, it is possible to make it big in the world of CFDs.

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