Building a Positive Investment Mentality

Remember: "There is no fool, only those who are lazy."

1) Start small and strictly control your position to within 10% approximately. In the beginning, your technical judgment, reaction speed and trading psychology will not be as mature, and you should only start by investing a small sum of money to train yourself up. Consider it a lesson learnt if you suffer a loss, and an experience gained if you make a profit. Many people told us that they have gone through the demo account and are ready, but they are wrong. In a demo account, you are in a relaxed mood as you are not dealing with your own money; hence you are able to handle the price fluctuations with a positive state of mind. But it is a different story when it comes to actual trading with your own money. As you see the market moving in a direction that is different from your position, you may be anxious to exit, only to regret when the price reverts back. Consequently, you may become fearful in placing an order in the future. Therefore, the demo account serves only to provide you with a learning environment on how to use the trading platform.

2) Always establish a stop loss order. This is especially useful for newcomers. By establishing a stop loss and take profit order, you can lock in the profit and minimize potential losses. Aim for small losses and big profits. Go slow in the initial stage, and once you have gained enough experience, you can open or close a position at any time.

3) Attempt to make your own analysis. Use the recommendations from analysts solely as a reference, and do not let the views of others affect your own decisions. In the face of a volatile market and an ever-changing gold price, analysts have based their views on their own theories when making a forecast. With differing views on whether to buy or sell, which do you follow? It will be wise to study their comments and gather the necessary information for your own analysis to determine the market trends. While your analysis may not be accurate initially, you will pick up some investment techniques after some time. Do not always rely on the predictions of others or that of the analysts; otherwise, you will forever remain a beginner.

Start by understanding yourself and identifying the type of investor you are

Long-term investor

Long-term investors will generally accumulate gold as a form of long term savings. The investment may be made due to political and turbulent situations, or to guard against inflation on assets by buying in gold. Long-term investors generally do not sell their gold stocks unless when forced to; they are very different from those who sell whenever the price is right to earn profits because their investment objective is to preserve value rather than to earn profits.

Mid- and short-term investor

For mid- and short-term investor, the profit from gold trading is higher than other investment products, and the capital investment is comparatively lower. Investors can now buy and sell on the same day, while mid-term investors can trade in the market for several weeks or months. There is a higher degree of risk control for spot gold as the trading is open 24 hours, and investors can always enter or exit the market to lock in profits and control risks. In gold trading, the information to be analyzed is simpler, mainly focusing on the oil price and the U.S. dollar, thus making it more suitable for investors who are new to gold investment.