People have had respect and a fascination with GOLD since the dawn of civilization. Many Investors, also, have an interest in Gold but are often apprehensive to attempt to get involved in the Gold market. This is often prompted by an uncertainty in political issues and world stability. These are the very issues that often affect the price of Gold.
If someone had purchased Gold in the fall of 2011 when the value of Gold was more than $1,900.00 (see area "B" of the accompanying Gold price chart), they would of experienced some uneasy sleepless nights while the price of Gold fell to $1,040.00 (see area "C" on price chart) by January 2016.
This makes evident that any Investor needs to be cautious and aware of the potential swings in the price of Gold.
Is there a prudent method to participate in the Gold market ? To practice the old reliable "Buy & Hold" method could have been catastrophic. Although there are some who advocate buying and holding Gold at anytime - as can be seen and heard in many late night radio and television sales programs. These (and others) would have you buy Gold with no mention of the fact that the price of Gold could easily go down, perhaps before or after it goes up.
The main issue, then, is "when" to buy Gold, and, when to sell Gold short ?
People who believe that there will be catastrophic world events will predict that it is inevitable for the price of Gold to quickly skyrocket to $5,000 or $10,000 an ounce. If calm minds prevail, the price of Gold will probably continue in it's usually up and down trends. This probable eventuality makes a prudent Investor contemplate which would be the best method to employ to invest and trade Gold.
The undeniable reality is the follow these trends that continue to go up... then to trend down. From mid 2009, Gold trended up from $900 (see area "A" on the price chart) to a high of over $1,900 in late 2011. During that time period the trend in Gold was up. It was the time for any Investor to be buying Gold. From late 2011 to late 2015 and early 2016 Gold trended down to $1,040, during which time is was wise for an Investor to be Selling Gold Short.
The logic is this ... to buy any security - in this case GOLD, when the trend is up. And, to be selling the same security short while the trend is down.
Some day traders sell short every few seconds or minutes. Some long term Investors may buy and hold for many, many years. There is a practical and profitable middle ground somewhere between those two extreme methods.
The key is to determine the "Mid-Term" trend ! If properly adjusted and set, the mid-term trend will define the most common price movements that an Investor can follow and profit from.
There is no "perfect" trading model to follow. All traders and all trading models have losing trades. Every trader or investor needs to acknowledge and accept this fact. However, if a simple method is applied to technical charts that can easily and quickly visually determine the mid-term trend, it will improve investment decisions and avoid "trading blind". A glance at such a trend will prevent some common mistakes like buying highs or selling lows. So, it's use is invaluable.
A video on youtube entitled "GOLD - The Best Investment - $10,000 a month" discusses the benefits of following the mid-term trend and shows some good examples that could be followed and learned from.
Gold lends itself well to these trends up and trends down. Take advantage of these trends and price movements. If and when Gold does shoot to $5,000, as some people predict, the mid-term trend will continue to trend and move in that direction. Following it will continue to be a profitable method of trading.
Gold has proven over time that it has large price movements. Some education and testing in mid-term price trend analysis could be successfully and profitably applied to trading Gold.
Gold can be the best investment ... if traded conscientiously according to the mid-term trend.
Bruce Ross
MidTermAlgo
