What are the best ways to get started in buying gold
Buying gold via CFDs is relatively simple. If you go through a specialist broker, there is also the advantage of knowing they have a duty of care toward their clients. Millions of investors now have more convenient ways to buy gold. As with any investment, you will be better prepared if you choose the right broker.
You can buy or sell gold with just a few clicks. Gold can be purchased from a computer or mobile phone, so you can follow market fluctuations wherever you are.
How do you limit the risks and not lose money?
Market risk is related to the rise or fall in the price of your assets, generating profits or losses. Trading systems include features like stop loss that can help mitigate market risk. Another risk to consider is the broker with whom you place funds. Another way to manage risk is to use investment insurance.
What are the main mistakes of inexperienced investors when investing in gold?
Buying gold through CFDs also allows leverage, which is a way to increase the risk-reward ratio. Due to the volatility of gold, leverage should instead be used by intermediate investors rather than beginners. If you decide to buy gold with a leverage fixed at x10, it means that the size of the position will be ten times greater than the amount of money you allocate to it.
So if you buy $5,000 of gold and use 10x leverage, the actual position size (“exposure”) will be $50,000. A 4% cash flow on a $50,000 position will generate a +/- $2,000 return. Leverage is not a complicated principle, but it is one that you need to fully understand. At eToro, we offer our clients the possibility to manage the leverage effects that can be used.
Are there specific strategies that are more effective in getting started buying gold?
The most important thing for a gold trader is to find a gold trading strategy that works for him. Some plans require more (or less) time, while others work better in particular market conditions.
To invest in gold, you should consider the following factors:
Familiarize yourself with the online broker you are trading through, their knowledge of trading commodities, especially gold, and the instruments you can use.
Establish the minimum tradable position. Gold and other commodities generally require more significant cash balances than stocks and forex.
Gold can be a high-risk investment. It is essential to be well-informed about the purchase of gold before carrying out the first transaction. eToro offers many educational tools to advise investors on buying gold.
What are the most advanced strategies for investing in gold?
The buy-and-hold strategy
The historical reasons that make gold an attractive investment lead some investors to want to buy a small amount of gold. Investing in gold at a time when gold is near the lower end of its Bollinger band range can allow you to find a better investment entry point.