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Trading Gold on Short Time Frame

Gold ETF TradingAt this time last year, gold–as indicated by the SPDR GLD exchange traded fund–was 30 percent more expensive than it is now. For traders, this is really good news. Gold, much like major stock indices, has historically gone up in value on a very regular basis. If you look at it over a broader spectrum, the poor 2013 that gold saw is just a minor bump in the road. The GLD ETF was once over $180 per share, and right now, it is sitting at just under $120. The high point was arrived at in the summer of 2011, though. Zoom back even farther, and you will see that even with this two-plus year setback in trading, gold is still much higher than it was at this time five years ago, when the ETF was valued at barely over $80 per share.

This is obviously a long term approach to trading. Buying shares in gold-based funds, such as the SPDR ETFs is a good way to move things a little more short term, but even so, trading with ETFs, futures, and the like, is a type of trading where you necessarily will see a lot of waiting. This is fine for many people, but not everyone is geared toward being a successful long term trader. Many individuals need to see short term success in order to stay in the market. In today’s world of trading, this is possible on a level never before seen. With things like binary options, you can trade things like gold on a very short term scale, and see nice returns if you are successful.

Many brokers will even now offer you 60 second gold options. With a commodity, movement is a bit slower than with the major stocks when it comes to price action, but if you time these trades strategically, you can see big results. For one example, trading the news can give you big results. Many people do not know that China is on the cusp of offering gold ETFs to their domestic traders. When this happens, timing your trades around the success–or lack of success–that Chinese trading reporters bring public could enhance your profits in a big way very quickly.

This can be used to your advantage in a few different ways. Some brokers offer gold options paired with other currencies besides the dollar, such as the euro. If you are familiar with these currencies, you can leverage your knowledge into extra trades–and this has the potential to turn your investment cash into even more money. It’s also possible to convert your knowledge of relationships between assets into extra cash. So if you know that historically the Australian dollar has responded positively to increases in the price of gold, you can look at AUD/USD and predict fairly accurately that call options will be the right choice.

There’s a lot more to it than this; timing your trades will also be very important. But having a firm starting point in market knowledge will get you going in the right direction. Timeframes are important, and you do need to realize that some will be more profitable than others. Trading gold at the 60 second option level might seem attractive because you can fit more trades in during the same amount of time, but realistically, gold moves slow and 60 second trades will seldom be the right choice here, especially because you will be earning a much smaller rate of return. This isn’t to say that they are never the right choice–during big events the increased volume of trades you can fit will help you significantly–but you will find that slower moving trades will be more beneficial to you over the long run because they are easier to predict and they have a higher return.
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