Trade On Forex

In the last decade, many investors turned towards forex after the historic crash in the stock market. Many small investors lost more than 60-70% of their recovery accounts in the stock market crash. Now, forex is a great money development opportunity. It is being said that forex trading will make many millionaires in this decade.

Many people don't know this that you can trade gold on forex too. Many forex broker platforms that you use to trade forex, allow trading of gold and silver against the Us Dollar (Usd) from the same platform. Both these precious metals have high demand in the commercial sector and as the global economy recovers from the recession, the prices of gold and silver are imaginable to skyrockets as commercial output picks up and consumers start buying again. When you trade a currency pair, you go long on one currency and short on the other. In other words, you plainly buy one and sell the other.

In case of spot gold trading on forex, you trade one ounce of gold in the spot market against the Us Dollar (Usd). So just like when you trade a currency pair, when you trade gold on forex, you are taking either a long or a short position in gold against Usd. There are many currency pairs that you can trade like the Gbpusd, Eurusd, Uadusd, Nzdusd, Jpyusd. Spot trading gold on forex is almost similar with gold replacing one currency in the pair and the other currency is all the time Usd.

So, in spot gold trading on forex, you are trading one troy ounce of gold against Usd. Interestingly the sticker for this is also Xauusd with Xau representing one ounce of gold. Now, suppose the price quote in the spot market is 1100 Xauusd. What this means is that one troy ounce of gold in the spot market right now is equal to ,100 Usd.

Just like any other financial market, the price quote in the gold spot market has got a bid/ask spread. So if the price quote is 1110/1115, it means that you can sell one troy ounce of gold in the spot market for ,110 and buy one troy ounce of gold at ,115 meaning you will have to pay a spread of per troy ounce when trading in gold in the spot market.Spot gold trading on forex is a fast spirited market and the spread keeps on changing throughout the day.

Now a standard lot in currency trading is equal to 0,000. But in case of gold on forex, a standard lot is equal to 10 troy ounces of gold. So, if you find the price quote to be 1112/1117 and you are concerned in going long. In that case you will have to buy 1 lot of gold that is equal to ,170. Spot gold market is a fast spirited market and the price quotes keep on changing. So, suppose just after 60 minutes, you find the quote to be 1120/1126. You see a profit and decree to get out selling at ,200 development a profit of . Now if you had used leverage, you would have needed a much lower preliminary venture to make a profit of in just 60 minutes.

Gold is also know as anti dollar. What this means is that their is an inverse correlation between gold and Usd. This inverse connection can help you hedge your positions in other currency pairs.