HOW TO BUY & SELL GOLD : Part1🏅 CFDS VS ETFS 🏅
➡️ GOLD ETFS (Right Chart)
ETFS PHYSICAL GOLD (ASX:GOLD) offers low-cost access to physical gold via the stock exchange and avoids the need for investors to personally store their own bullion.
Each GOLD unit comes with an entitlement to an amount of "physical bullion". This means : Real Gold, Real Bars.
⬅️ GOLD CFDS (Left Chart)
CFDs on GOLD US$/OZ (TVC:GOLD) (OANDA:XAUUSD)
CFD stands for Contracts for Difference, with the difference being between where you enter a trade and where you exit. Simply put, when the position is closed, you’ll receive the profit or incur the loss on that difference. When you trade a CFD you’re speculating on the movement of the price only, rather than traditional stocks where you purchase a physical asset. You do not ever own any real gold bars.
🤓 CFD TRADE EXAMPLE
The price of gold is measured by its weight. Therefore, the price shows how much it costs for one ounce of gold in US dollars. For example, if the gold (XAUUSD) price is $1600.00, it means an ounce of gold is traded at US$1600.00. Similarly, the price of silver is its price per ounce in USD. If the silver (XAGUSD) price is 28.00, it means that an ounce of silver is traded at US$28.00.
If you have bought gold for $1600, you do not have an ounce of gold that you can hold, but you rather have the obligation to buy XAU at US$1600. When you close your position, you sell the XAU and close your exposure. If you sell it for $1605.00, you have made profit of $5 for every ounce (unit) of gold in your contract. The same concept applies to silver trading. If you have bought silver (XAGUSD) for $28.00 and sell at $28.50, you would have made a profit of $0.50 for every ounce of silver in your contract.
🤔 WHY TRADE CFDS?
If you’re looking to invest in the price movements of instruments, rather than purchasing physical assets
To take advantage of swift fluctuations in the underlying instrument or security. This is popular with short-term investors looking to profit from intra-day and overnight movements in the market
To take advantage of leverage and spread capital across a range of different instruments rather than tie it up in a single investment (note: this approach can increase risk)
As a risk management tool to hedge exposure
Commodities
Understanding ETFsHello traders, in this post I will explain different types of ETFs and what is an ETF (Exchange-Traded Funds).
ETF for example is a package of different stocks that have similar characteristics. One characteristic could be that they all are in the same sector. Some ETFs track indexes, commodities, and more. Those packages are listed on an exchange and are traded just like stocks.
Traders and investors use ETFs to diversify with the provided indexes (or other products) with lower costs, or if the trader can’t trade in futures contracts, it is possible to use ETFs that are related to a specific future. Also, there are options on ETFs that can be used as an alternative for expensive indexes.
Leveraged ETFs
Most of the ETFs are trading in a 1:1 ratio, for example, NASDAQ 100 is currently at $12621 and the relevant ETF QQQ is $307.8, the difference is 1 to 40, but the returns are the same (1:1).
The ETF NUGT on the other hand is moving with correlation to the gold miners index, but if the index return will be 10%, the ETF NUGT return will be 20%, because it is leveraged 2 to 1.
Those kinds of ETFs are not for investors or long-term traders, only for the short term. This is because the returns are multiplied by 2. If the index will move down 7% NUGT will move down 14%. Eventually, it will move substantially lower in price because there will be a major correction of 30%+ that will cause a 60%+ drop in price. Thus, there will be a split.
If you look at September 2012 you can see that NUGT price is $36000, this is because there were many splits due to the phenomenon I described above. NUGT was never really traded at $36000.
In the chart, the orange line NUGT. Moving 300% between March to August, the blue line GOLD 40%.
Reverse ETFs
ETFs that move in the opposite direction to the index.
For example, DUST is a leveraged ETF and going in the opposite direction to the gold miners index.
In the chart, the green line DUST. Decreasing substantial percents due to leverage.
ETFs that based on Futures
There are two types:
ETFs that own the commodity – those ETFs are moving almost the same as the commodity itself. For example GLD
In the chart above, the blue line is the GOLD price in cash, the red line is GLD.
ETFs that buy the futures of the commodity and not the physical commodity, don’t track the commodity with the same returns as the previous type, for example, VXX (VIX), USO (oil), UNG (gas).
As discussed in the previous post Futures have a time premium. When you buy ETF that is based on futures, that means that you buy also the premium attached to that future. As time passes, that premium is lost, and then the ETF buys the next contract with a new time premium. As time will pass, you will lose this premium also… and so forth… This is something to be aware of.
Orderzones Explained : A form of Support & ResistanceHello traders!
In this educational idea im going to be going over the 5 different main types of Order Zones on Crypto Charts & how i identify and draw these zones, aswell as what they are used for.
Orderzones are a way of marking on the chart historically significant areas where price had strong reactions to.
The price tends to come back to these areas and have strong reactions, the Order Zones act as a form of Support & Resistance.
For those who are new to Technical Analysis ; "Support" is a area on the chart price and demand (buying pressure) increases from, with "Resistance" being the opposite, with price decreasing and sell orders (Supply of asset) increasing from the latter.
Why do i use Order Zones?
-Reduces risk & increases probability of potential trades
-Trying to trade with; not against larger size traders such as institutions that use similar price levels due to historic signifcance
-Providing clear entry and exit points to calculate Risk:Reward Ratio (R:R)
-Providing reference points to capitalize on historical areas of market volatility
-Allows us to reduce clutter and find key areas as the volatility on Crypto makes it difficult to chart
We have 5 main types:
-Supply Clusters
-Demand Clusters
-Single Candle Supply
-Single Candle Demand
-Orderblocks
Supply Clusters & Demand Clusters
First we must find areas on the chart that look similar to a tightly squeezed together rectangle . Price should then make a "thrust" (major increase, or decrease in value) from this rectangular area. We use the Rectangle Tool to draw a zone across these areas.
In the below image you can click for a in depth explanation of how to use these clusters in your trades.
Single Candle Supply & Single Candle Demand
To draw and identify the Zones first we must find areas on the chart where a strong reversal occurs, at the start of the trend reversal, or at swing points we can find larger then normal "wicks": (wicks are the thin, needle points at the end of the candlesticks ) as you can see in the above and below images.)
Click the below image for a in depth explanation of how to use these zones in your trades.
Orderblocks
Orderblocks are the small square shaped candle bodies, usually found in between significant price moments. They are small "pauses" before the next move. We use the Rectangle Tool to draw a zone across these areas.
In the below image you can click for a in depth explanation of how to use Orderblocks in your trades.
If you take some time to go back over your charts (especially on the Monthly, Weekly & Daily timeframes) and test out some of these Order Zones, you will see more then often price comes back to these areas before reversing like a magnet towards the next closest Order Zone so they become a useful tool in any traders arsenal.
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An up and down channelWelcome Back.
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What Is an Ascending Channel?
An ascending channel is the price action contained between upward sloping parallel lines. Higher highs and higher lows characterize this price pattern. Technical analysts construct an ascending channel by drawing a lower trend line that connects the swing lows, and an upper channel line that joins the swing highs.
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An ascending channel is used in technical analysis to show an uptrend in a security’s price.
It is formed from two positive sloping trend lines drawn above and below a price series depicting resistance and support levels, respectively.
Channels are used commonly in technical analysis to confirm trends and identify breakouts and reversals.
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A bearish channel is a continuation chart pattern (of a trend). A bearish channel is formed by two parallel bearish lines. The price progresses between these two parallel lines; the upper line is called the "resistance line"; the lower line is called the "support line".
Each of these lines must have been touched at least twice to validate the pattern.
NB: a line is said to be "valid" if the price line touches the support or resistance at least 3 times.
This implies that the bearish channel pattern is considered valid if the price touches the support line at least 3 times and the resistance line twice (or the support line at least twice and the resistance line 3 times).
How to trade with Elliott wave Elliott wave trader buy at the low of wave 1 and 3 while exit at 5th wave
buying at the low of 1st wave or 2nd corrective wave give you numbers for both sl and tp.
since 3rd wave always move beyond the high of 1st wave and longest among 1,3 and 5, catching 3rd wave alone gives you enough profit.
if you buy at 2nd corrective wave you put your sl below low of 1st wave.
as Elliott wave has guidelines for every wave. buying at the low of 2nd wave give you opportunity to profit 3 and 5 wave at the same time. Since 4th wave can't enter in the price territory of 1st and you entered below the high of 1st wave you can lock your profit at 1st wave and wait till end of 5th which give profit of entire trend.
Gold Vs 10 Year Treasury Bond Interest Rates In this video, I explain in detail the relationship between the price of Gold and the interest rate on 10-Year Government Treasury Bonds.
You will understand why Gold is used as a hedge against inflation when investors cannot protect the purchasing power of their wealth through the purchase of government treasury bonds.
Gold has risen in value by 231% since 2007 from $545 an ounce to $1,809 an ounce.
As central banks must keep interest rates low coming out of the Covid-19 pandemic to help governments borrow huge amounts to inject stimulus into the economy, gold remains alongside stocks the only way investors can hedge the risk of inflation from eroding the value of their wealth.
We also look at Gold priced in Euro's, Pounds and Australian dollars as interest rates in Europe, Australia and the UK have hit record lows over the past few years.
You are going to love this educational video!!!
J Shape FormationHello Traders!
Have you ever wonder why the market turns back after the clear breakout of the trendline and even after a perfect retest?? Here is your answer. There must be The J shape above that trendline or above that resistance because this J shape mostly forms above the resistance.
This J shape pattern occurs again and again and it's easy to find because of its clean and clear formation.
These are the three shapes that form after the J Formation and the head and shoulder pattern is one of them.
Formation 1
You can catch the drop at the peak by selling on the reversal candle or if there are continuous bullish candles then wait for the first bearish candle and go for the sell. In formation 1 it always drops hard.
If Market already dropped hard then wait for the market to retest the bottom of the J pattern and sell it and target will be the same size as the J shape.
Formation 2
In a rare scenario, it bounces back because there must be some strong support. This is also tradeable when you see the market turning back at support you can go for the buy.
Formation 3
It's the Head and shoulder pattern and it can be traded when it's half completed with the help of this formation But it is not compulsory that Head and shoulder formation always have a clear J shape.
GOLD & THE TUESDAY NIGHT? WINS STOCK MARKET RALLY
? WINS STOCK MARKET DOWNTURN
NO WINNER TONIGHT STOCK MARKET SEVERE DOWNTURN
BECAUSE STOCK MARKET DOES NOT LIKE UNCERTAINTY.
Descending Chart Pattern
Price Bias is Bearish
While gold has an inverse relationship with the dollar, stocks markets also have a deep connection to the metal.
Investors commonly perceive gold as a haven in the event of a severe stock market downturn. ...
Typically, stocks have a high negative correlation with the US dollar .
However, gold has an opposite relationship.
The major Exchange Traded DerivativesChina continues to privatize companies, open its markets to foreign investors, and develop relations around the future silk road.
In 1 month China is launching its international Copper future. It sounds interesting but I do not know if individual investors care enough for this future to be available with my broker, maybe IG will have it.
As the USA declines (and perhaps Europe), China might become the "hub" for commodity derivatives (thinking of industrial metals and agri),
if this is the case I expect retail traders and their brokers to catch up in only a decade or two (seriously).
For this occasion let's look at the most traded derivatives around the world.
1- Agriculture
*It is a non-profit, self-regulating and membership legal entity established on February 28, 1993 (when China opened itself to the free markets and emerged out of poverty). Non-profit because that's evil capitalism. Nothing is free though. So who pays? The average chinese factory worker? Haha!
Back in 2018 they started opening up to foreign investors (Iron Ore, a little after their Oil contract that was the first one ever open to foreigners), the exchange also has an english website:
www.chinadaily.com.cn
**The Zhengzhou Commodity Exchange (ZCE) is China's first futures exchange,
Zhengzhou Airport Economy Zone is China's first Airport Economy Zone.
Zhengzhou is not a SPECIAL economic zone, it is only an economic zone.
Unsurprisingly China is not big on "financial" products (interest rates & equity index) but they are big on more basic things: Agriculture & Mining.
2- Energy
So ye Moscow, NYMEX (CME), and London ICE mostly.
3- Metals
4- Equity Index
How many contracts would you want? Yes.
India and Brazil are at the top of the list.
India is famous for its overvaluations and many gambling bagholders, and Brazil for its large numbers of gambling day traders.
Stocks and stock indexes (and ETFs) have by far the most individual investors, as those are supposed to be more noob friendly due to having a much lower skill floor.
Think of it (lol players) as Yasuo, Master Yi and Volibear mains. For HOMM the equivalent is 3 months afk farm Necro on a giant map.
They have been convinced that it was a positive sum game where everyone can make easy money.
There are 2 major categories of retail investors: bagholders & day gamblers. They both consistently lose.
Due to the power of compounding day gamblers lose money much faster than bagholders, which is why people advise individual investors to stick to bagholding.
Bagholding also gives people more time to think it through and quit with some of their money left, while day gamblers will have lost most of their money before the initial excitement has waned off.
5- FX
6- Rates
7- Other
No idea what all of this mess is.
For my part I only trade a couple of those: 3 grains, 2 metals (Gold Copper), Texas Oil & NatGas, all on the CME (7 total, with some correlations).
Sometimes I look at softs on the ICE and Nickel on the LME but I don't really touch them much.
Rarely will get into indices, I do follow where they are going from far away.
I actually am active in the smallest derivatives that make 7.4%, 5%, 4.9%, 1.6% and 1% while avoiding equities that make 50% :D
But I do Forex alot, got around 10 currencies in my watchlist. With correlations and everything I would say FX is about twice to thrice as big as commodities for me.
There is already plenty to do and plenty of good uncorrelated opportunities to go for. With on top of that the occasional Bitcoin or major indice or stock bet, I'd say that's about as far as someone can push it with just being coinflipping.
I know that professionals hold stocks for quarters or years, Forex for a few days or a few weeks, retail just day trades everything, and I do not know for indices and commodities and rates. But I know commodities sort of behave much more like FX than equities and open interest fluctuates similarly so I would say we are looking at weeks to month in my opinion, for professionals of course, retail just day trades everything they'd day trade overnight swaps and EOD indexes if they found a way.
There are alot of those futures. More than enough to have your hands full. Might have some bubbles in China in the future and if this is the case I'll be the first to know way before mainstreet gets all excited and rushes in at the top (and push it higher) as they often do.
In July 2019 ZCE Apples (bigger than CME Corn) gapped down by 40%. I am not ready for this. Unless they have some "fair and profit-free" options :D
I wouldn't mind getting some surprise 40% infinite gains with tiny limited losses. I guess they are not big on "evil profit driven too abstract for me to understand" speculation.
Haha so how are their behinds after that 40% gap with no speculator to absorb the risk? 😉
There HAS to be broken flaws to exploit in the future. Maybe when that happens they will rollback all trades "for fairness" silly commies.
Well too early to tell, we will see.
Where would you enter?A channel is one of the most basic price action patterns
The channel is a powerful yet often overlooked chart pattern and combines several forms of technical analysis to provide traders with potential points for entering and exiting trades, as well as controlling risk. The first step is to learn how to identify channels. The next steps include determining where and when to enter a trade, where to place stop-loss orders, and where to take profits.
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Trading channels can be drawn on charts to help see uptrends and downtrends in a stock, commodity, ETF , or forex pair.
Traders also use channels to identify potential buy and sell points, as well as set price targets and stop-loss points.
Ascending channels angle up during uptrends and descending channels slope downward in downtrends.
Other technical indicators, such as volume , can enhance the signals generated from trading channels.
How long the channel has lasted will help determine the trend's underlying strength.
Waiting to Enter on a Channel BreakHello my friend | Welcome Back.
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* Once I have this structure in place, finding the trend becomes relatively easy. When the pair is trending lower, I only want to look for selling opportunities. Of course, the opposite is true when the pair begins trending higher.
Enter in the Direction of the Trend
At this point, you have identified the major trend and found a favorable corrective pattern such as a channel or a wedge.
The next step is to look for an entry once price breaks the pattern.
Ascending Triangle Definition and TacticsHello my friend | Welcome Back.
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* The trendlines of a triangle need to run along at least two swing highs and two swing lows.
* Ascending triangles are considered a continuation pattern, as the price will typically breakout of the triangle in the price direction prevailing before the triangle. Although, this won't always occur. A breakout in any direction is noteworthy.
* A long trade is taken if the price breaks above the top of the pattern.
* A short trade is taken if the price breaks below the lower trendline.
* A stop loss is typically placed just outside the pattern on the opposite side from the breakout.
* A profit target is calculated by taking the height of the triangle, at its thickest point, and adding or subtracting that to/from the breakout point.
Thank you
Very useful comicsBe like Alex, do not be like Jack!
Many of my students have a bad experience working with scam brokers.
I will tell you the story of one of them!
He decides to try different brokers and get a lot of bonuses from them......
Everyone loves to get a lot of attention. So, the managers of these brokers called him every few times a day.
They told many beautiful stories about a wonderful life with a bag of money, expensive vacation, sports cars, and personal Jet...))).
But when they talk about such things, they sit in a small room without air conditioning, dressed in cheap clothes and eating fast food.
Yes, he will get it all if he cheats you and hundreds of other novice traders!
Then you can think about the police, court, or indictment, but they just change their head office address and contact phone number.
They never refund money, except when you have a good influential friend.
I have two videos for you on my youtube channel.
The first one is about how to identify a cheating broker and the second one about how to choose a reliable broker.
I recommend that you check both of them and never make the same mistake as my friend.
He did not get his money back and that managers (traders, bots) are losing most of their deposit.
Be careful, take care of your money, take care of your nerves, take time... be like Alex!).
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How to trade GOLD/SILVER RATIO in Any platform!?This is the first educational post I Make on Tradingview so make sure you like and comment and follow if you like it,
in this post I will explain how to trade The GOLD/SILVER RATIO in any platform
You can use the same strategy to trade ETH/BTC in Binance Futures with leverage ...
first lets define what is gold silver ratio ,
The gold/silver ratio (GSR) is the current price of an ounce of gold divided by the current price of an ounce of silver. It's a simple numerical calculation that shows how many multiples gold is trading relative to the price of silver, a common indicator used by precious metals investors worldwide.
this indicator help us know which is going to gain more or wich is going to lose more in some cases when there is high volatility in the markets you might find this chart stable with very strong trading opportunity for example back in the 26/2/2020 when the markets were uncertain and volatile this chart made a very good breakout and huge gains! you can find that on the chart above
so now lets explain how to trade it in any platform that have GOLD/USD and SILVER/USD
if you want to short the GSR
all what you need to do is to sell short GOLD and buy long SILVER with the same amount of money and leverage in each of the positions
Example
if you open a long position with 1000$ and x3 in SILVER/USD you have to open a short position in GOLD/USD at the same moment with 1000$ and x3 leverage.
If you want to long the GSR
all you need to do is the opposite of shorting we buy GOLD/USD and sell SILVER/USD with same rules again we should use the same amount of money and us the same leverage in each of the two position.
thanks for reading good luck
Gold 100 pips Buy Breakdown 1890-1900Gold had formed a clear support during London Session on the 30m and 1h timeframes. We had strong bullish momentum so my bias was bullish in the short term. I then switched down to the 15m timeframe to look for a good entry to minimise drawdown.
When a bullish 15m candle closed starting from support, I waited for the next candle to form bullish and my final confirmation was that it broke the high of the previous bullish 15m candle. Then I entered the trade.
My stops were below the 15m wick rejections and my two targets were 1897 and 1900.
Both targets were smashed within a few hours with very minimal drawdown.
If any candle from 15m upwards closed below support, I would have closed my positions as it was invalidate the setup.
OIL10.4.20 I am generally satisfied with the video, but I wasn't clear at the end because I was worried about upload failures for the video. Please read this for a minute so the end of the video will be more clear: oil has traded lower to a support area, but it closed near the low of the daily bar. There will be some traders who think in terms of probabilities... think that the market is likely to move lower because it's a bearish swing that closed near its low>>>and they might be correct. From a risk reward point of view, you can find a relatively close structural stop... and because of this, even knowing that the market may have a slight edge for sellers... you may be willing to take the long trade. On the other hand, even if the market favors the price moving lower, there is no nearby structural stop to manage a short trade... and that may be enough to walk away from the trade. It is for me, personally. Bad R:R filters out lots of trades for me, personally. This is because I have a core belief that I will find better trades, and I don't need to settle for this trade.