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Platinum Trading Guide: How to Trade Platinum

Date Modified: 17/06/2024

Platinum is a versatile metal that plays a critical role in many industries that can impact the supply and demand for Platinum (PL), potentially presenting opportunities for those interested in trading the commodity. Here is what you might want to know about Platinum trading:

an illustration of platinum bars


  • Platinum is considered rarer than the safe-haven asset that is Gold (XAU).
  • In addition to its use in jewellery, Platinum’s core demand can also come from automotive, industrial, and investment.
  • Platinum trading can be a way to get exposure on the volatility of this precious metal’s price.
  • To trade Platinum, traders can use trading styles such as day trading and swing trading.
  • There are a variety of strategies that could be applied to Platinum trading depending on the market conditions, such as news trading, breakout trading, and trend trading.
  • With the Plus500’s trading platform, traders can speculate on Platinum prices with Platinum trading Contracts for Differences (CFDs), commodities-related Exchange-Traded Funds (ETFs) CFDs and Platinum-related share CFDs*.

*Availability subject to regulation.

Understanding Platinum

Platinum, a precious metal known for its silvery sheen, durability, and resistance to corrosion, heat, and even harsh chemicals, boasts remarkable versatility.

Beyond its use in jewellery, Platinum plays a significant role in medical equipment, cleans the air through catalytic converters in internal combustion engine vehicles (ICEs) and fuel cell electric vehicles (FCEVs) and hybrid cars, as well as applications across diverse industries like chemicals, petroleum refining, and hydrogen production, among others.

The price of the precious metal can be influenced by a range of factors. The global supply and demand play a central role with various factors being able to presumably influence the Platinum market. The strength of the US dollar, investor confidence, the health of the automotive industry, jewellery trends, and even the amount of recycled Platinum can impact the value of the commodity.

To find out more about Platinum and what influences its price, read our article titled ’Platinum Price Guide: What Drives Platinum Prices?

How to Trade Platinum: Popular Trading Strategies

To trade the Platinum market more effectively, traders should be aware of some of the most popular trading strategies used in Platinum trading. Let’s take a closer look at two ways to analyse market trends, one strategy for short-term trades, and two strategies for capturing price movements over a longer timeframe.

Platinum Market Analysis Methods

There are two popular market study approaches that traders can use to analyse the Platinum market to decide whether or not the price of the commodity is likely to increase or decrease: technical analysis and fundamental analysis.

Technical analysis is a market analysis method relying on past price movements, trading volume and trends to forecast potential Platinum price movement. Technical analysts can use various trading tools such as trading charts, technical indicators, and price patterns to determine whether they want to buy or short-sell Platinum.

Fundamental analysis is a way to assess the market based on economic, social, political, and industrial forces. These can potentially offer a deeper understanding of factors that can influence the overall supply and demand for Platinum. It gives traders hints about the current health of the market and potential future trends.

Each technique offers a unique lens for examining the Platinum market in order to help traders make trading decisions, so neither method is inherently superior.

Platinum traders can consider technical analysis as a potential way to identify short-term Platinum trading opportunities and to fine-tune entry and exit points, while they might see fundamental analysis as a way to provide insights into the long-term health of the Platinum market.

While some commodity traders might believe that only one market monitoring and forecasting method should be used in Platinum trading, others might decide to use a combination of both market analysis methods to gain a more complete understanding of the Platinum market dynamics and the potential trading opportunities that can arise.

Platinum Day Trading Strategy

Platinum day trading is based on capitalising on possible price swings within a single trading day with positions typically held for a brief period, ranging from a few minutes to a few hours.

This strategy offers a key benefit; day traders can avoid the risk of overnight surprises or gaps in price movements that might occur when they’re not actively monitoring the market. Additionally, they sidestep overnight funding fees often associated with holding positions overnight with financial products like CFDs.

However, day trading Platinum often comes with a significant risk due to leverage. As it magnifies potential profits, leverage also amplifies losses. This is particularly true when dealing with short-term movements and financial products like CFDs on Platinum.

News trading is an active trading approach often used with day trading. It aims at trading during significant news events that can potentially impact the Platinum market and increase the precious metal’s price volatility.

Trading economic data is a way of assumably seising price movements that often occur surrounding the release of significant economic information such as CPI, GDP, PCE, PMI, and central banks’ decisions on interest rates.

Platinum Swing Trading Strategies

Compared to day trading, Platinum swing trading is a trading style that targets potential price movements over a timeframe exceeding a single day.

Swing traders are usually trying to capitalise on a few days or weeks’ worths of Platinum price movements. It might, therefore, be considered a more flexible trading approach in terms of market monitoring and availability.

Nonetheless, the extended time horizon exposes traders to possible broader Platinum market swings and news events that could cause unexpected price movements. Swing traders also have to face overnight funding fees and implement strong risk management strategies to be comfortable holding positions even when the Platinum market experiences volatility.

Range trading and trend trading, for example, are two popular swing trading strategies.

Moreover, swing traders using a range trading strategy on Platinum try to identify ascending, descending or lateral price channels, which represent historical boundaries where the price of Platinum has fluctuated between a resistance level (the upper limit of a channel) and a support level (its lower limit).

By entering trades within this range, Platinum swing traders are trying to capitalise on the repeated price swings of the commodity. They might buy near a support line in anticipation of an uptrend, or short-sell near a resistance line expecting a price decline. This approach allows them to possibly seize the predictable back-and-forth price movements within the range with support and resistance trading.

Platinum swing traders can also leverage bigger trends in the Platinum market over days or weeks once they’ve identified the primary direction of the Platinum market. Prices can either follow an upward trend (bullish price movement), a downward trend (a bearish price movement), or a sideways trend (a neutral or lateral price movement).

Traders can also presumably buy Platinum during pullbacks within an uptrend (based on their belief that Platinum prices can resume their upward trajectory) or short-selling Platinum during rallies within a downtrend (based on the expectation that Platinum prices can resume its downward trajectory).

Similarly to any other trading strategy, swing trading also comes with a significant risk due to leverage.

What Is Platinum CFDs Trading with Plus500?

Trading Platinum with CFDs or Contracts For Difference is one way to speculate on the precious metal’s price.

On Plus500, the Platinum (PL) CFD contract provides the price per troy ounce in USD of the commodity based on Platinum futures from the CME Group.

Unlike buying physical Platinum bars or coins, CFDs don’t give you ownership of the metal itself that you need to store. Instead, they function as an agreement between you and your CFD provider to exchange the difference in the Platinum price from the entry until the exit of a trade.

One of the features of Platinum CFD trading is leverage and margin trading. It means that you can start trading Platinum with limited trading capital, as they allow traders to control a larger position with a smaller initial investment, potentially magnifying their profits but also losses. A potential advantage of trading Platinum with CFDs is that it is possible to trade both bullish and bearish markets, hence allowing traders to seize more market conditions.

However, in spite of its potential advantages, it is important to note that leverage can significantly amplify losses if the market moves against your position. This volatility, coupled with the complexity of CFDs, makes them a potentially risky option for traders who lack market experience and a strong understanding of trading concepts.

Platinum Trading Tips

As you begin exploring trading Platinum, familiarising yourself with some key trading concepts and tips can equip you with valuable knowledge for possibly seising numerous trading opportunities:

  1. Find out what kind of trader you are;
  2. Set up realistic and achievable trading goals;
  3. Accept that losses are part of your trading journey and learn from your mistakes;
  4. Realise that emotions can influence your trading decisions and learn to control them;
  5. Understand what Platinum is and how to trade it;
  6. Decide which market analysing and forecasting tools to use within technical and fundamental analysis methods;
  7. Choose a trading style, such as Platinum day trading, swing trading, and position trading;
  8. Opt for a commodity trading strategy, like news trading, breakout trading and trend trading;
  9. Determine the trading setups to follow to enter and exit the Platinum market;
  10. Make use of risk management tools in your trading, such as stop-loss and take-profit orders;
  11. Write a trading plan;
  12. Get ready to trade Platinum with Plus500;
  13. Open a demo account with Plus500 to trade in real-market conditions with virtual funds;
  14. Learn how to trade with Plus500;
  15. Switch to a real Plus500 trading account;
  16. Deposit funds;
  17. Stay up-to-date with the latest news and market insights;
  18. Get real-time prices notifications and updates with alerts;
  19. Track your progress to evaluate your trading strategy;
  20. Be flexible in your Platinum trading approach to be able to potentially improve your trading execution skills and adapt your strategy to changing conditions;
  21. Always improve your trading skills and knowledge.

Platinum Trading — Frequently Asked Questions (FAQs):

What does Platinum trading mean?

Platinum trading is about speculating on the price movements of the precious metal rather than physically buying and holding Platinum itself over the long run. With Platinum trading with derivatives, you don’t own any physical Platinum because you’re trading financial instruments that track the price of Platinum such as futures, options, ETFs, and CFDs on Platinum.

Can I trade Platinum as a beginner?

Yes, you can trade Platinum as a beginner trader. To get into commodity trading for beginners, you should take time to learn how Platinum trading works given that CFD trading is complex and risky. You should also only choose Platinum trading if you believe that the precious metal fits your trader profile.

What are the most used trading strategies to trade Platinum?

The most popular strategies for Platinum trading often include technical and/or fundamental analysis to make Platinum buying or selling decisions within a day (day trading) or a few days (swing trading). News trading, breakout trading, support and resistance trading and trend trading are among the most widely used trading techniques for trading Platinum.

What should I be careful of when trading Platinum?

If you decide to trade Platinum, you should be aware of the various factors that can influence Platinum prices, such as the value of the USD, automotive demand, the expanding industrial uses of the metal, recycling rates, trading psychology, geopolitical instability in Platinum-producing countries, and Platinum mine discoveries, among other factors.

Is trading Gold better than trading Platinum?

There’s no single ’better option’ between gold and Platinum trading. It depends on your individual goals, risk tolerance, and investment strategy. Gold is generally considered a safer haven asset with more established markets and higher liquidity, while Platinum can be more volatile due to its industrial uses.

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