Dewara

Extreme market volatility over the past year and the agony of watching the market fall off a cliff while pension managers are out playing golf has driven more and more people into short-term trading.

Trading follows a different methodology from investing: you are looking for short-term movements and speculating on price falls as well as rises. Investing entails looking for value and taking a longer-term view.

Here are 10 trading tips that have stood the test of time.

1. Knowledge is king. Have an economic calendar, and a company reporting and dividend schedule to hand. Devour the business pages and read the odd trading book. Have a financial television channel on, but avoid information overload. Read more »

Solution:
Be realistic about your goals.

One of the biggest mistakes that can crop up in gold trading is getting caught up in the belief that there are unimaginable riches just waiting to be tapped. There is no promised glory land that will appear just because you want it bad enough. There is profit potential, and there is a risk of loss, but lay everything on the line searching for El Dorado and you risk disappointment as well. Read more »

Solution:
Stick to your trading plan and your analysis.

It is easy to get caught up in the game. No matter what gold investment you are participating in, there is a lot of adrenaline and emotion that goes with trading. You should already have developed a trading plan, so sticking to it should be easy no matter what the crowd is doing. Note that this is different than trend following. What matters here is avoiding hype. The old trading adage, “Buy the rumor, sell the fact” speaks to the kind of over-inflated action that can crop up at times. Be wary of a stampede in one direction or another, and as long as your planned exits are not triggered, there is probably no reason to run.

Solution:
Gold is a global commodity - keep an eye on the big picture.

It is natural to look to the things you are familiar with when you are doing your analysis. For some investors, this means reading domestic news and weighing that within their price forecasts for gold. The problem is that the marketplace is global. One must be as aware of international news and economic forces that might play or weigh on the price of precious metals. Sure, gold is priced in
US dollars – but shifting concerns in the Euro zone or China are just as likely to move prices dramatically and bring market volatility. Read more »

Solution:
Remember that gold prices can move up or down.

Most investors won’t acknowledge that an asset could turn against them. They invest assuming they’ll be successful, refusing to look in the rearview mirror. It’s also common for emerging traders to use a calculator to predict how much they’ll make and how they’ll spend the unrealized profits! Whoa! It’s dangerous to anticipate how much you’ll make in advance. Gold bugs are not immune to this kind of starry-eyed conclusion. Gold has a particular allure and luster that spans centuries and it is easy to get caught with gold fever. The problem is, it hasn’t been that long since gold was at record low prices. Read more »

Solution:
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. Read more »

Solution:
Check your heart at the door.

Stick to your trading plan. Having those barriers and limits will help you keep your emotions in check. The reason many emerging traders fail to consistently earn profits is because of their perceptions of money. Find methods to desensitize yourself to the emotional connection to money. Consider trading smaller size increments. Trading in smaller quantities can help minimize both the losses and the emotional distress that often comes with losing larger amounts of capital. As your experience grows, then you can consider upping the ante. Read more »

Solution:
Have a plan – think through your gold investment.

Before you participate in any kind of investment, you should have a master plan that is prepared and understood before entering into any trade. Take the time to perform due diligence having a coherent outline will help you avoid many of the common pitfalls of  trading.

Every trading plan must include the following points: Read more »

Mistake #1 – Trading without a plan

Mistake #2 – Getting emotional about gold

Read more »

In presenting Fibonacci Trading tools, candlesticks, and chart price patterns, we concentrate on the ones that have a high analytical value and can be combined with each other. Our goal is to avoid information overf low, while providing adequate detail, because all of the strategies can be important in different market situations. Read more »