How to Start Day Trading in Gold - Future Markets
Silvering Precious Metals LLC
Trading
3 years ago
1 QCP
Futures Markets
Day trading gold is speculating on its short-term price movements. Physical gold is not actually handled or taken possession of, rather the transactions take place electronically and only profits or losses are reflected in the trading account.
There are a number of ways to trade gold. The main way is through a futures contract. A futures contract is an agreement to buy or sell something-like gold-at a future date. Buying a gold futures contract doesn't mean you actually have to take possession of the physical commodity.
Day traders close out all contracts (trades) each day and make a profit based on the difference between the price they bought the contract and the price they sold it at. Gold futures trade on COMEX. There is a standard gold future (GC) which represents 100 troy ounces of gold, and a micro gold future (MGC), which represents 10 troy ounces.
On the futures exchange, gold moves in 0.10usd increments only. This increment is called a- tick -it is the smallest movement a futures contract can make. If you buy or sell a futures contract, how many ticks the price moves away from your entry price determines your profit or loss. To calculate your profit or loss (your trading platform will also show you, but it is good to understand how it works) you'll first need to know the tick value of the contract you are trading.
For a standard contract, the tick value is 10usd. This is because the contract represents 100 ounces of gold, and 100 ounces multiplied by the 0.10usd tick size results in 10usd. That means for each contract, a one tick movement will result in a profit or loss of 10usd. If it moves 10 ticks, you win or loss 100usd. If it moves 10 ticks and you are holding 3 contracts, your profit or loss is 300.1usd
For a micro contract, the tick value is 1usd. This is because the contract represents 10 ounces of gold, and 10 ounces multiplied by the 0.10usd tick size results in 1usd. That means for each contract, a one tick movement will result in a profit or loss of 1usd. If it moves 10 ticks, you win or loss 10usd. If it moves 10 ticks and you are holding 3 contracts, your profit or loss is 30.2usd
Gold Futures
The amount you need in your account to day trade a gold futures contract will depend on your futures broker. NinjaTrader for example requires you have 1,000usd in your account to open a position for one E-Mini Gold Futures contract. You also need enough in the account to accommodate for potential losses.
For a day trade of a standard Gold Futures (GC) contract, you need 2,000usd in your account, plus additional funds to accommodate losses.3 The amount required by your broker to open a day trading position is called Intra-day margin; it varies by the broker and is subject to change.
These figures assume you are day trading and closing out positions before the market closes each day.
https://www.bullionstarpartner.com/
Day trading gold is speculating on its short-term price movements. Physical gold is not actually handled or taken possession of, rather the transactions take place electronically and only profits or losses are reflected in the trading account.
There are a number of ways to trade gold. The main way is through a futures contract. A futures contract is an agreement to buy or sell something-like gold-at a future date. Buying a gold futures contract doesn't mean you actually have to take possession of the physical commodity.
Day traders close out all contracts (trades) each day and make a profit based on the difference between the price they bought the contract and the price they sold it at. Gold futures trade on COMEX. There is a standard gold future (GC) which represents 100 troy ounces of gold, and a micro gold future (MGC), which represents 10 troy ounces.
On the futures exchange, gold moves in 0.10usd increments only. This increment is called a- tick -it is the smallest movement a futures contract can make. If you buy or sell a futures contract, how many ticks the price moves away from your entry price determines your profit or loss. To calculate your profit or loss (your trading platform will also show you, but it is good to understand how it works) you'll first need to know the tick value of the contract you are trading.
For a standard contract, the tick value is 10usd. This is because the contract represents 100 ounces of gold, and 100 ounces multiplied by the 0.10usd tick size results in 10usd. That means for each contract, a one tick movement will result in a profit or loss of 10usd. If it moves 10 ticks, you win or loss 100usd. If it moves 10 ticks and you are holding 3 contracts, your profit or loss is 300.1usd
For a micro contract, the tick value is 1usd. This is because the contract represents 10 ounces of gold, and 10 ounces multiplied by the 0.10usd tick size results in 1usd. That means for each contract, a one tick movement will result in a profit or loss of 1usd. If it moves 10 ticks, you win or loss 10usd. If it moves 10 ticks and you are holding 3 contracts, your profit or loss is 30.2usd
Gold Futures
The amount you need in your account to day trade a gold futures contract will depend on your futures broker. NinjaTrader for example requires you have 1,000usd in your account to open a position for one E-Mini Gold Futures contract. You also need enough in the account to accommodate for potential losses.
For a day trade of a standard Gold Futures (GC) contract, you need 2,000usd in your account, plus additional funds to accommodate losses.3 The amount required by your broker to open a day trading position is called Intra-day margin; it varies by the broker and is subject to change.
These figures assume you are day trading and closing out positions before the market closes each day.
https://www.bullionstarpartner.com/
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