Find streamlined analysis or a trading system for gold that works for you.
Whether you are buying and selling physical bullion or trading in gold derivatives, it is easy to get caught up in the dazzle from the internet and TV. There is no shortage of people willing to sell you their outlooks, analysis and systems.
The best suggestion is to find what works for you. Fundamental analysis can happen in a keystroke. Global economic reports are at everyone’s fingertips. The techniques available for technical analysis have expanded with the use of computers. Be aware of the outlets for analysis, but don’t get bogged down by them. Once you find something that works for you, stick with it and refine it. There is no holy grail. Become comfortable with using an approach that has a proven record of success for you and don’t agonize.
Once you have actually taken a position or have an investment in hand, prepare to react and take appropriate action. Have a firm exit plan with stop loss orders, if possible. They can take the decision making out of your hands when it’s time to realize a loss and move on. Have a reasonable profit objective and exit your investment when it is attained.
It doesn’t happen often enough, but getting out too early can be an emotional experience – sometimes worse than losing.
Monitoring a position can become a full time job. The market can do one of three things: go up, go down, or sit there. You should have a plan of action in place to react to all three and be willing and able to follow through on that plan. That will prevent you from falling victim to paralysis by analysis, or hemming and hawing. Inaction can result in losing more than you planned and prepared for, or worse – losing profits. There is nothing worse than watching a winning trade turn into a loser.