How to trade gold future

Gold future is a very high leverage trading. You can either make a lot of money per trade or lost a lot of money too.

Instructions

Difficulty: Moderate

1. What is future??
   Future is an obligation to perform. If you own or long on future then you have an obligation to take delivery of the underlying future contract.
   If you sold or short on future then you have an obligation to deliver the underlying future contract.
2. Owning or long on gold future can be used to hedge against inflation.
   It cost much less than owning the gold bullion it self. Yet it still benefit from the movement of gold price.
3. A contract of gold future = 100 troy ounces of gold.
   Which mean a dollar movement of gold price will move the price of your gold future by $100 per contract. But remember there are other factors that affect the gold future price as well.
4. What affect gold future price??
   * The gold price it self
   * Volatility is determine how volatile the future price move.
   High volatility mean the price go up and down rapidly or big swing in price.
   Low volatility mean the price stay in the price channel or sideway.
   There are two different volatility historical volatility and implied volatility.
5. There are two different volatility historical volatility and implied volatility.
   Historical volatility is the past or historic volatility (the fact).
   Implied volatility is the emotional factor of the price movement.
6. * Future expiration date is a time value that determine when the contract will expire.
7. You can close your position before expiration date. Either buy to close your position if you open a sell position or sell to close if you open a buy position in the beginning.
8. 95% people that trade gold future close their position before the expiration date to avoid taking physical delivery of gold bullion and come up with a lot of money to pay for it.
9. Because gold future is high leverage trading and just require a small margin compare if you trade the underlying gold bullion it self, you can gain a lot of money from the money that you originally invested but you can also loss more than the original margin that you invested in the beginning. Then in this case you will get margin call or they will close some of your position until the margin requirement met.
10. The other way to trade gold future is by using future options. If you own or long on gold future you can generate income monthly by selling or short on the call future options with the higher strike price but it also limit or cap your potential gain if gold price rally.
11. You can use future options to limit your loss as well.
    Consult with your broker! You can trade gold future with broker assisted account or do it yourself with online account.