Let’s take a break from exposing scams and talk about one of the most popular trading assets, the Gold option. Available on every binary options platform in the market today. Based on statistics published by Anyoption.com (the pioneer of binary options since 2007),
Gold is the 2nd most traded asset right after the currency pair EUR/USD! Many FX trading platforms are now integrating commodity trading on their platforms due to the increased demand. Today we decided to post a very important article and expose the 5 Biggest Myths and false assumptions we see every day based on comments and discussions on various online trading forums and some of the largest day-trading portals.
5 Gold Trading Myths – Exposing misconceptions!
Gold Trading Myth #1:
If you are an experienced day-trader you’ll be surprised but many newbies are under a false assumption that they are literally Gold trading. This is a big mistake and indicates that you might lack a basic understanding of what OTC trading stands for. In reality, you are actually investing on a digital binary options contact of the Gold Option. The benefit with trading Gold vs buying Gold is that at least you can set the trade amount! If you purchase Google stocks, you are the owner of the shares and it’s a different story but don’t mix-up Gold Trading with the stock market.
Gold Trading Myth #2:
The price of commodities, and Gold in particular, doesn’t fluctuate as much as the price of most currency pairs, making it easier to forecast. This is a big myth and many traders tend to believe this is true. It is definitely the case if you are trading long-term, but with binary options we’re dealing with short time frames, often 15 minutes or less, and the pips movement is definitely not less/more volatile based on any credible studies or reliable sources. This is something you can observe on your short-term trading charts.
Gold Trading Myth #3:
The price of gold is always on the raise, with simple fundamental analysis you can easily forecast the asset’s movement. Another lie and a myth and unfortunately many people by into this claim. It’s 2015 at the moment but what exactly happened in 2013? Traders who thought that Gold was a good long-term investment, ended up losing a lot of money as you can clearly see. This is a partial myth since it seems to grow like real-estate, however for those of us who are trading short-term, the long-term appreciation of the price of GD is not relevant to us!
Gold Trading Myth #4:
Price action strategies and technical analysis are not as powerful as fundamental analysis when trading the Gold option. We’re seeing these statements made on many blogs but it’s simply not true. We’ve seen some bloggers completely try to debunk the use of any charts or technical analysis with commodities trading and we wonder if these folks ever traded binary options in their life.
Many traders choose to trade Gold on their own and we’ve seen more than a few powerful strategies, offered for free on many blogs with a lot of great feedback and live trades to back up their use of indicators in combination with fundamental analysis, which again, completely debunks this myth!
Gold Trading Myth #5:
Many binary options platforms offer the ‘Gold/currencies’ pairs and in general, commodities/currencies type options and it’s becoming a “big hit” lately, more like a hit to your wallet! The combination is highly risky and conducting proper technical, short-term analysis for such pairs is virtually impossible but you’re welcome to give it a try if you’re down with the new trend. We’re not sure why some strategists and bloggers tend to speak so highly of those options, even though we didn’t manage to find a single strategy with proven results that is associated with any of the “hybrid options”, therefore we certainly consider any claims that these assets are easier to work with, are simply not true and you shouldn’t take the word of anyone who tells you otherwise, unless they actually have a strategy to back it up with documented trading results.
If you know of other Gold Myths or have any comments or questions don’t hesitate to share it with us! As always, in case you are new to the industry, we encourage you to start with a Free Demo Account, especially if you plan to trade on your own. Thank you for taking a few moments to read our thoughts on the digital Gold option and good luck with your trading!