The beauty of gold trading at least from a futures point of view is that it is open to both long-term and short-term investments and in fact, the problem with gold has been how to approach it on either of the two approaches noted above. Well to be honest it’s not an easy task to come up with trading techniques and strategies that will focus primarily on any approach as in most cases what we may think are long-term strategies may have a lot to do with short-term ones and the reverse is equally true. Even with this point considered however, the reality of gold trading is that it favors trading strategies that have got some aspects of moving averages employed in other words the simple truth about the trade is that it is very consistent in terms of profit if at all the moving average strategies are used all be it other techniques in futures trading can be explored to the maximum.
As much as there is a good number of gold investors who use the RSI or the relative strength index in basing their investment plans, many will tell you that they will be satisfied with the RSI if they rhyme and are consistent with moving averages and that is no surprise, moving averages have time and again proven to be one of the most effective technique that can be used in determining which way to go. So how do moving averages work in gold trading? The idea of the averages is that they give the average price of the commodity over a specified period of time and that means that the average given will be a representative of the lows and the highest and that is a very good figure to tell you about the prices even if it has some limitations. The good thing about moving averages is that, there is that point where the downward trend will seem likely and that which upward trends will do and that is done on a daily basis for short-term investors or better still on an yearly basis for long-term ones.
As for those investors who are in online futures trading with gold as their trading commodity, the use of the moving averages becomes even easier as the cross over points are updated regularly online. Crossovers are actually figures in prices that would either indicate an upcoming fall in prices or an increase, the idea of crossovers is based on the moving averages computed either yearly or daily but in most cases it is done on daily basis. The way the moving averages suit gold trading is just perfect and this is a strategy that definitely will provide any gold investor a real chance of making good decisions towards profitability.