I sold out of ETF Gold with a 25% profit a few weeks ago.
I have £20K savings, and I've made £4000 from trading shares, corp bonds, euros etc this past year.
But hey if you need money for a house, to match the price moves you need leverage..so I'm going to gamble £3000 of my profits on a single trade. I'm keeping the rest of my capital in relatively safe defensive stocks, funds and a basket of currencies.
Well tell me I'm a total idiot..but this is the trade I'm planning to make in the next weeks.
Deposit £3000 with my CFD dealer.
Place a buy order for 20 units at 5% margin with a strike price of $1000/oz. That exposes me to $20 per point.
That will cover my margin if the price drops as far as $900/oz.
On the next leg up I expect gold to move up to $1500.
That should make a £10,000 profit on the trade. I will be placing a trailing stop loss on the way up though for sure.
This will be my first ever leveraged trade, I understand the risks but think I've a good change of making good money on it.
Is this totally crazy????