Trading gold and silver can make you a fortune. The best way to trade gold, silver or other precious metals is to trade futures contract. Now, trading futures can be risky. Futures contracts move fast and show a lot of volatility. Traders profit from this volatility. However, if you are not comfortable with risk then you can keep on trading gold and silver ETFs like the SPDR Gold Shares (GLD) or the iShares Silver Trust (SLV) and other precious metals ETFs. But the point is this that anyone can learn futures trading and profitably trade gold and silver futures contracts.

This gold trading strategy is simple and involves making a series of four trades and then repeating that process again and again as many times as you want. This way, you are able to manage your risk and make a successful living as a precious metals trader. Suppose, the gold market is in an uptrend! You buy one gold contract that means 100 ounces of gold. You can buy a futures contract on a margin that is usually around $5,000 with most of the brokers. So, with only $5,000 you are able to control 100 ounces of gold in the market. Each point the futures contract moves up or down, you make or lose $10.

Let’s get back to our gold trading strategy. Suppose, you buy one gold futures contract that means 100 ounces of gold. It closes up by 30 points in the next few days. You are happy. By the end of the week, it gains another 20 points. You sell your gold futures contract. So, with this one gold futures contract you have made 50 points. 50 points means $500 profit. This is your first trade in a series of four trades that ended in a $500 profit.

Now, your second trade starts in a series of four trades. You are happy with your first trade. You have made $500. You enter the market again with two contracts now. You wait for a few days and lo and behold, the market moves 50 points up as you had expected. You sell the two contracts and make a nice $1,000 profit. Your second trade is now complete.

Now, markets don’t move in straight lines. Prices move up, then down and then up. Recently gold prices went as high as $1,400 then made a sudden retracement of around $70 just a few days later shocking everyone in the market. So, when the prices move down, don’t get shocked. Nothing moves up forever. Whatever moves up will come down also. Now,rumors can make the market jittery. Gold prices rise during times of global political and economic uncertainty. Rumors are flying in the market that gold prices will move up again. You wait for a few days and it does start to rise. You buy three contracts this time and wait for a few days and lo and behold, the market moves by 100 points by the end of the week. You sell the three contracts and make a nice $3,000 profit.

Gold price are on the rise. So, you make your last fourth trade by buying four contracts this time. By the end of the week, each contract is up by 50 points. You sell all the four contracts and make a nice profit of $6,500 in just a matter of few weeks. After this you will remove this profit of $6,500 from your account and start all over again with your series of four trades.

You can make these four trades again and again starting from scratch after each four trades. After each four trades, you remove the profit and start again small. This way, you reduce your risk of losing all your profits if the market suddenly moves against you. This is how professional gold traders trade and this is how you should trade. You must have observed that their is nothing much in this gold trading strategy. That’s what it is and that’s how you should keep it!

Mr. Ahmad Hassam has done Masters from Harvard University. Trade Gold with this Forex Signals from two top gun traders. Read this Gold Mining Stocks Guide from two pro investors.