The table on the right show exactly how the maths work…it couldn’t be simpler – you start your trading fund with just £1,000, calculating your stake at 0.5% per $ of gold price movement.
That means for every $ that the price of gold moves in the direction you’ve bet on you earn 0.5% of your fund (which is £5 if your fund starts at £1,000).
You can bet on the price of gold moving higher or lower – it’s not like buying shares where you have buy low and sell high…you can bet on the price falling if you like – which (considering gold lost over $700 per ounce in value from its high point in September 2011 to June 2013) is a good thing!
The price of gold fluctuates throughout the month, some months moving as much as $300. In the course of just one day it’s not uncommon for the price to go up by $30 and then fall by $40 – providing a trading range of $70 on the day.
Remember, we’re able to bet on price movements both up and down, so picking up $50 of correctly predicted price movement isn’t as much as it may seem.
As each month goes by you continue to stake just half a percent of your trading fund per $ of gold price movement – as your fund increases so does the value of your stake, but overall as a percentage of your fund you are risking exactly the same as when you had just £1,000 in the kitty.
This compounding action quickly grows your fund to a point where, just 2 years after you started, your fund is worth over £200,000!
So if it’s that simple, what could possibly go wrong??
Most independent online traders lose money. Like with most things in life, you have to invest time (and usually money) to learn how to do something well before you’re even close to competent…and isn’t it normally the case that the more worthwhile or valuable whatever it is you’re attempting to master is, the harder it is to succeed.
You always get some gifted individuals who pick things up naturally, but they’re the exception…in most cases you have to commit and dedicate yourself to learning.
Mastering the different technical analysis techniques, knowing what to use and what, and understanding how the macro-economic picture impacts the gold market are all vital to becoming an expert and successful gold trader.
To the novice trader, or someone new to the gold market, this can sound like a foreign language and is understandably off-putting…which is why we have made it our mission to help you succeed.