CFDs on GOLD US$/OZ (TVC:GOLD) (OANDA:XAUUSD)

CFD stands for Contracts for Difference, with the difference being between where you enter a trade and where you exit. Simply put, when the position is closed, you’ll receive the profit or incur the loss on that difference. When you trade a CFD you’re speculating on the movement of the price only, rather than traditional stocks where you purchase a physical asset. You do not ever own any real gold bars.

🤓 CFD TRADE EXAMPLE

The price of gold is measured by its weight. Therefore, the price shows how much it costs for one ounce of gold in US dollars. For example, if the gold (XAUUSD) price is $1600.00, it means an ounce of gold is traded at US$1600.00. Similarly, the price of silver is its price per ounce in USD. If the silver (XAGUSD) price is 28.00, it means that an ounce of silver is traded at US$28.00.

If you have bought gold for $1600, you do not have an ounce of gold that you can hold, but you rather have the obligation to buy XAU at US$1600. When you close your position, you sell the XAU and close your exposure. If you sell it for $1605.00, you have made profit of $5 for every ounce (unit) of gold in your contract. The same concept applies to silver trading. If you have bought silver (XAGUSD) for $28.00 and sell at $28.50, you would have made a profit of $0.50 for every ounce of silver in your contract.

🤔 WHY TRADE CFDS?

If you’re looking to invest in the price movements of instruments, rather than purchasing physical assets

To take advantage of swift fluctuations in the underlying instrument or security. This is popular with short-term investors looking to profit from intra-day and overnight movements in the market

To take advantage of leverage and spread capital across a range of different instruments rather than tie it up in a single investment (note: this approach can increase risk)

As a risk management tool to hedge exposure

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AUD/USD Forecast: Bulls charging for 0.7200

AUD/USD Current Price: 0.70492

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FIBONACCI TIME ZONES

How to use Fibonacci Time Zones

Fib Time Zone is a technical analysis tool consisting of a series of vertical lines which extend along the time (horizontal) axis.

Fibonacci time zones only indicate potential areas of importance related to time. No regard is given to price.

The base interval is set by drawing a trend line between price highs or lows. The Time Zone tool then plots a series of vertical lines at increasing intervals.

Fibonacci Time Zone parameters are defined by the Fibonacci Sequence. Starting with 0 and 1, each number is the sum of the two prior numbers (1+2=3, 2+3=5, 5+8=13 8+13=21 etc…).

The main function of the Fibonacci Time Zone tool is to forecast or anticipate potential reversals based on elapsed time.

The first few Fibonacci numbers create relatively tight Fibonacci Time Zones at the beginning of the chart. Because of this it may be necessary to ignore the first few zones. After the first few zones, the zones expand quickly and allows some breathing room as the sequence unfolds. The basic theory behind Fib Time Zones is that potential reversal points can be found by looking ahead to the starting point of new zones.

Traditional Fibonacci Retracement

Fibonacci Retracements are an extremely popular tool in technical analysis. They are created by first drawing a trend line between two extreme points. The vertical distance between those two points is then divided up vertically with horizontal lines placed at key levels at the key Fibonacci Ratios of 23.6%, 38.2%, 61.8% and 100%.

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