Trading Gold and Silver: Why and How?
Harborx app is commonly known as ‘Currency’ or ‘Forex’ trading, but guess what – there’s more to it. If you go to the rates page, not only will you see a long list of currency pairs, but also Gold and Silver! So if you’re one of those people that get more excited about the sparkle than the movement of currency pairs, then trading Gold and Silver may be perfect for you.
Is Gold Really the World’s Best Investment?
This is an ongoing debate, where some experts believe that yes, in fact trading precious metals, such as Gold and Silver, has multiple benefits:
- High liquidity. The gold market is incredibly large. Not only is it relatively affordable to trade gold, there are large amounts of it available and the market is less likely to fluctuate based on large trades (which sometimes happens with stock market, for example).
Essential value.Gold has inherent value; there is a finite amount of gold in the world and there is no way to create new gold. Thus, it will continue to become more valuable with time, often either keeping pace with or outperforming inflation even if there are other issues impacting the global economy. Unlike some other commodities, gold will never be worthless; apart from its value as a precious metal, it’s also used in many engineering and scientific fields.
- Predictability. Gold can be seen as fairly predictable due to the large amounts of historical knowledge and analysis that we have regarding its activity. As an example, gold has a tendency to increase in value every time the global economy struggles; traders can use this knowledge to plan their trades ahead.
- Lots of proven tips and tricks. Anywhere you go in the investor’s world, you can get advice and tips about gold. Of course, the problem there becomes stripping out the experienced, valuable knowledge from the inexperienced guess work, but the advantage remains: you can learn quite a lot about gold in a fairly small amount of time. The investment community publishes a wealth of information and gold analysis, there are tips around every corner, and there are services such as trading signals that specialize directly within the gold market. All of this creates a market that has a spectacularly low barrier to entry compared to more obscured commodity trading.Is It True that Gold Never Depreciates?
Yes and no – in a way. If you look at the gold charts and other professional analysis, you will see that the price of gold goes up and down – just like for any asset. In 2012, there was a heated discussion about US regulators’ plans to classify gold as a ‘Zero-risk asset’. This classification would not be entirely accurate, since a ‘zero-risk asset’’s price can never go down, even in the short run – which is sometimes the case with gold.
Yet, just like it’s true for other commodities, gold and silver are a good hedge (safe haven) against the inflation. So if you’re used to keeping an eye on the price of gold, this is the asset you should consider trading.
Trading Gold and Silver With Harborx
Trading gold and silver with Harborx is easy. Open your app and go to the Rates page. Find your instrument (gold, for example) of choice and click ‘Sell’ if you believe that the price will go down. Choose ‘Buy’ if you think the price will go up.
Once you open your trade, be sure to set a ‘Stop Loss’ (the minimum price you’re prepared for your asset to hit’) and a ‘Take Profit’ – the max price at which you want to get out of the trade and secure your profits.
Important: take note of the Quantity (lot) of your trade. While all currency pairs on Harborx are set to 0.01 lots, the minimum trade volume for Gold and Silver are 0.1 lots, and you can increase it manually.
What Does the Lot Size Mean?
First of all, it means bigger trade. As a result, you can win more, but you can also lose more. These trades will affect your Trading Power, and you can get the 33% trading power notification soon. To avoid for your Trading Power reaching zero and some of your positions being automatically closed, make sure you have sufficient account balance. The logic is simple: higher account balance means more trading power!
There is a high level of risk involved with trading forex, commodities, indices and other contract-for-differences. Past performance is not a reliable indicator of future results. You must be aware of the risks associated with trading directly or indirectly on margin.
Please ensure that you fully understand the risks involved and do not invest with money you cannot afford to lose. Please seek independent advice if the risks involved seem unclear to you and refer to our full risk disclaimer.
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