You may have come across stories of young traders online who earn tens of thousands of dollars a day sitting at home. Some transactions can bring a lot of income – but in order to achieve such results, you must learn a great deal.
For those who are hearing this concept for the first time, trading is the process of buying and selling sequentially to make a profit. There are many different types of trading, and technically, trading in precious metals is no different from trading currency pairs on the stock exchange. It should be noted that trading in precious metals such as gold is much more reliable and safer, since it is easier to predict price changes for precious metals than for stocks, and a beginner like you can quickly understand how it works.
Imagine that you are learning to ride a bike. You don’t start with a mountain bike; first you need a simple and reliable bike to learn how to keep your balance. In trading, such a “bicycle” is gold. Gold has been valued for thousands of years, and its price changes slowly and predictably. On the other hand, stocks are like fast cars: they can “accelerate” or “slow down” and are more difficult to follow.
Starting with gold, you will better understand how trading works and prepare for more difficult “races” with stocks.
Fundamentals of gold trading
The basic principles of gold trading can be stated as follows:
- Buy gold;
- Predict whether the price of gold will rise or fall;
- Make an accurate forecast;
- Sell gold at a price higher than you bought it;
- Make a profit.
Unfortunately, it can happen when the bet is not played and the price of gold falls, you make a loss.
Today, anyone can trade gold, as many convenient online platforms with the necessary tools have been developed.
Trading gold at home is as convenient as possible, but in closed walls it is important to control your emotions such as greed, fear and confidence. These feelings can strongly influence your decisions, which can affect your profits. Especially often among beginners, emotions such as excitement and impulsivity can lead to unsuccessful hasty decisions.
Example: A trader bought $100,000 worth of shares, hoping to sell them for more, but their price fell. Out of impulsiveness, he immediately sold them without thinking about the consequences, and began to make hasty deals, losing most of his capital.
What you need to work as a trader
There are two options for working in this field. Such a specialist may work for a bank company, a brokerage firm, or an investment fund. Alternatively, he can trade on his own using his own money.
In the first case, the trader only needs skills. So, he will work with the money of clients or the company, responsible for increasing capital.
And if the initial capital is not enough, then the trader has two solutions:
- using leverage is a kind of borrowing from a broker who provides money for transactions;
- contact companies that offer a brokerage account, but take a percentage of the profit.
In both cases, this is a risk — the trader will manage borrowed funds instead of his own.
And in the second case, in addition to skills, the trader needs a brokerage account and capital. How much money does it take? It is not clear, someone says that a minimum of $50,000 is needed, and someone says that you can start with $2,000.
How can I trade gold?
Trading gold with demo money
To start your trading journey, we recommend using demo accounts – this is the safest way to learn and practice.
These accounts act as training tools that make it possible to trade without real money and understand how the market works. The JM platform offers its clients a free demo account that includes not only CFD gold, but also reflects real market conditions without distorting the market situation.
There are many formats for trading gold, but we recommend starting with the most popular method…
Gold Trading: CFDs
Trading gold through CFDs (stands for “contracts for difference”) has become one of the most popular ways to invest in gold online. Such CFD trading allows you to trade asset price movements (for example, gold, stocks or currencies) without actually owning the asset.
In simple words, you enter into an agreement with a broker to buy or sell an asset at a certain price. And as usual, there are two possible scenarios.
- If the price moves in your favor, then you make a profit.
- And if you are against it, you lose money.
CFDs allow you to trade on both rising and falling prices, which makes it possible to earn money in any market conditions. In general, this is a way to speculate on price changes without having to own an asset.
To trade CFDs for gold, you need to be a real master of your craft, because this is a kind of art of predicting price movements, whether they are rising or falling, and making transactions based on these forecasts. This is the easiest way to participate in the gold and foreign exchange market online!
Conclusion
So, to start your journey in gold trading, it is important to first understand how this market works. Then you need to choose a reliable broker who will process your transactions and connect you to the global gold markets.
And don’t forget about the importance of demo accounts! This is a great tool for beginners, allowing you to experiment, learn from mistakes and gain confidence — and all this without the risk of losing your money. And after completing the “training”, we will be glad to see your success in the real international gold trading market. Good luck!