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trading currencies or metals?

  • #1
  • First Post: Jan 19, 2011 3:33pm Jan 19, 2011 3:33pm
hello guys
as a technical trader i wanted to know what is the difference between currencies trading and precious metals trading (like gold and silver)?
and which one is easier to predict?
  • #2
  • Jan 20, 2011 12:00pm Jan 20, 2011 12:00pm
As Trepid rightly says, metals are easier to predict and are less volatile than foreign exchange markets.

Slightly off topic but an opportune point to make:

Metals are also better than stocks, according to a lot of my trading brethren. Stocks are really the worst no matter how you look at it since the markets are localized, and are much smaller in total volume traded.

The standard deviation of any given stock (and hence the risk) is also higher than any given currency pair.

Back to topic:

Standard deviation for metals is much lesser in comparison.
  • #3
  • Jan 20, 2011 5:48pm Jan 20, 2011 5:48pm
Quoting yasi
hello guys
as a technical trader i wanted to know what is the difference between currencies trading and precious metals trading (like gold and silver)?
and which one is easier to predict?
Well, lots of differences my friend....Metals are assumed to be easier to predict from a fundamental point of view since the price tends to move in anticipation of future supply and demand...From a technical point of view, currencies and metals are almost the same...

In metals, you trade them versus a currency, usually the USD...In currencies, you trade a currency versus another one and the USD might not be involved at all...

There is very big distinction though between metals and currencies....You can trade spot currencies, however, you can't trade spot metals...Spot metals trading do exist, however, it's not available for retail traders as in forex...

Try to read more about metals on the internet, I am pretty sure you will find a lot more information if you are considering trading them...The best place to start with is always the exchanges websites...

Feel free to contact me if you need any help, I have been trading metals among other commodities for more than 5 years now...


Regards,

Nader
  • #4
  • Jan 21, 2011 5:00am Jan 21, 2011 5:00am
It's wrong to assume that metals are easier to "predict" than FX. In fact, the foreign exchange markets have proven to be one of the most trending markets there are.

If we just take a step back and look at the big picture, we're only predicting 2 outcomes for BOTH markets, either up, or down.

Also, in terms of volatility, I believe metals have a much higher volatility than FX. Look at silver.
  • #5
  • Jan 21, 2011 1:33pm Jan 21, 2011 1:33pm
Quoting JodyOng
It's wrong to assume that metals are easier to "predict" than FX. In fact, the foreign exchange markets have proven to be one of the most trending markets there are.

If we just take a step back and look at the big picture, we're only predicting 2 outcomes for BOTH markets, either up, or down.

Also, in terms of volatility, I believe metals have a much higher volatility than FX. Look at silver.
Well, I just mentioned that Metals are a little easier to predict from a fundamental point of view and not absolute...I mentioned that technically, they are both the same...

There is a reasoning that Metals are easier fundamentally...It's because studying supply and demand as well as capacity, production and other fundamental factors affecting metals prices is easier than studying 2 economies representing the 2 currencies involved, again talking fundamentally....


Regards,

Nader
  • #6
  • Jan 23, 2011 3:09pm Jan 23, 2011 3:09pm
Quoting narafa
There is very big distinction though between metals and currencies....You can trade spot currencies, however, you can't trade spot metals...Spot metals trading do exist, however, it's not available for retail traders as in forex...
Actually, retail trading of precious metals has been readily available for quite some time.

Oanda, for one, has offered spot gold and silver against USD for about 5 years, since early 2006, as I recall, and added gold and silver against JPY last year.

Quite a few MT4 dealers also offer spot XAU/USD and XAG/USD.
  • #7
  • Jan 23, 2011 3:12pm Jan 23, 2011 3:12pm
Quoting JodyOng
Also, in terms of volatility, I believe metals have a much higher volatility than FX. Look at silver.
Spot on. Gold is more volatile than most currency pairs (majors and crosses), including GBP/JPY. And silver is typically nearly twice as volatile as gold.
  • #8
  • Jan 24, 2011 1:24am Jan 24, 2011 1:24am
Quoting nhct
Actually, retail trading of precious metals has been readily available for quite some time.

Oanda, for one, has offered spot gold and silver against USD for about 5 years, since early 2006, as I recall, and added gold and silver against JPY last year.

Quite a few MT4 dealers also offer spot XAU/USD and XAG/USD.
Well, I wasn't aware of this....Sorry my info regarding the available instruments seems outdated...I don't trade via market makers like Oanda, FXCM etc, that's why I am not aware of their additions and enhancements...


Regards,

Nader
  • #9
  • Feb 3, 2011 1:23am Feb 3, 2011 1:23am
thank you guys for all the info
i was encouraged to start trading metals (not gold because of the volacity)
i am planing to put it on test.
on my broker i have gold and silver with no spread!!! why? is there any rule for metals?
dose gold and silver get closed at night? i used to check it before christmas and new year and they got closed at midnight and in the morning they started with a gap...
i dont know where i am making mistake but please tell me is it possible?
  • #10
  • Last Post: Feb 5, 2011 1:00am Feb 5, 2011 1:00am
Well its a nice topic , even I was wondering for sometime, but then in metals trading , there are Precious metals such as GOLD,SILVER which should have different chars then the industrial type like LEAD, COPPER, ZINC, ALUMINUM etc, again its not all about fundamentals only affecting the metals price, the currencies, interest rates, risk appetite determines the money flow.Suppose say The American Dollar strengthens, then how the traders would perceive that - Gold or Dollars?
my 2 cents
luv to loose.....
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