I took this strategy from the service I am using, but it is very simple and straight forward.
Th strategy is to make money on the spread between the gold and s&p.
You should always long the gold and always short the s&p.
The position size should be the same
Positions should be opened only when the spread is negative i.e the gold is cheaper then s&p
Profit taken when spread is positive around say 10 - 15 USD.
There is very strong correlation between gold and S&P that recently emerged, so this strategy has historical background and performed really well in last few years. It is impossible to find a period longer than a month in which one would lose money using this strategy, so if you are interested in modest profits this is a perfect strategy that fits into a long term trends in gold and s&p. For technical explanation see the graph called: 's&p priced in gold'
Use the leverage conservatively. For every $10.000 in your account I reccommend buying not more than 50 oz. of gold and shorting 50 s&p contracts.
Th strategy is to make money on the spread between the gold and s&p.
You should always long the gold and always short the s&p.
The position size should be the same
Positions should be opened only when the spread is negative i.e the gold is cheaper then s&p
Profit taken when spread is positive around say 10 - 15 USD.
There is very strong correlation between gold and S&P that recently emerged, so this strategy has historical background and performed really well in last few years. It is impossible to find a period longer than a month in which one would lose money using this strategy, so if you are interested in modest profits this is a perfect strategy that fits into a long term trends in gold and s&p. For technical explanation see the graph called: 's&p priced in gold'
Use the leverage conservatively. For every $10.000 in your account I reccommend buying not more than 50 oz. of gold and shorting 50 s&p contracts.