APM Dubai: Gold Trade Strategies And Indicators For Long-Term Investors
For the longest time, investors have been looking for a strategy that consistently leads them to profit gains. Akin to a silver bullet, this elusive concept has been studied continuously for years. However, it’s much easier to digest the fact that no single strategy is enough to sprout consistent success. Only a combination of planning and research can ensure the outcomes you’re aiming for when it comes to the Gold trade.
In this article, APM Dubai is going to show you some strategies that you can use to analyze the gold market and makes moves for yourself! We’ll also throw in a quick introduction to market indicators and how you can use them to your advantage.
Approaching The Gold Trade With Strategy In Mind
Much like anything worth doing, you’ll need to come up with a sound strategy to make things come to fruition. Through years of trade and commerce, the gold market has seen several strategies come into play. Here are some of the best ones to keep in mind when planning your entry into the Precious Metals market.
News and Trends Trading
The first strategy that comes to mind in newer investors might be akin to the principles of News and Trends Trading. To summarize, this approach focuses on external factors such as economic performance and data sheets. Since these can affect the price of gold with other commodities, it’s wise to keep an eye on things even if it’s not the sole focus of your strategy.
In a similar vein, Trends Trading can supplement this strategy as it looks into the movement of price trends. It may take the form of observing consistent price increases or decreases and planning around them. An investor might also choose to trade gold products within specific periods where the direction of price movement is in your favor.
For those already familiar with market trading, you may have come across Day Trading strategies. These are still applicable within the Gold Market as the gap between the buying and selling prices within the day is small compared to other markets. Short-term investors tend to favor Gold ETFs for this strategy although some do invest in physical products as well.
Position and Price Action Trading
If you’re planning to have gold bullion as a long-term investment, then using a Position Trading strategy may work for you. This entails you profiting off the price fluctuations of gold over a long period of time. During the 2020 season, Gold investments averaged a return of around 24.6%. Silver returns followed closely as both metals appreciated due to global instabilities and economic conditions as of late.
Another take on this strategy is Price Action Trading where an Investor decides solely on price movements without taking into account price indicators. This is usually done by traders who conduct transactions in multiple timezones, syncing their trades according to global pricing data. From there, they decide their entry and exit points according to how the price is projected to move for the day.
Indicators Of Movement In The Gold Market
Now that we’ve gone over strategies, it’s time to conduct your transactions according to time and place. As with most markets, certain indicators can help make the choice clearer. One great example is how certain statistics like the Relative Strength Indicator help to analyze whether a trading decision is sound. This numerical statistic looks at whether gold is overbought, representing a nearing price decrease and a risk to short-term investors and day traders.
Certain statistics focus on the movement of gold prices such as the Exponential and Simple Moving Averages. If you’re interested in the state of prices as they come in, then the Exponential version will be of great help. Alternatively, the Simple Moving Average weighs in the price of gold across a wide timeframe.
Volatility is an aspect of economics that every investor becomes weary of. No matter what strategy you implement, market volatility will always pose a threat to it. Investors can use Bollinger Bands to measure the impact of volatility on investments and plan entrance and exit points from it. Other measures exist beyond these 3 examples that can help to improve your chances at profit!
For more information and guidance with Gold trading, a consultation with experts might just be the best choice! APM Dubai offers Rakesh Rajdev office consultations in regards to your plans to enter the gold trade. Visit our website and see the excellence and professionalism that Rakesh Rajdev has cultivated within APM Dubai.
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