Grading coins is an art. Grading coins can be a difficult subject for the beginning collector. Grading can be learned, studied and applied with a predictable and known outcome that eventually depends on judgment, not feelings. Today, most numismatists use the “Sheldon grading scale”. While there are those that complain of "too many grades", most experienced coin graders recognize and appreciate the fact that there is a wide range in features between ranges. Grading coins accurately is one of the most valuable skills a coin collector can learn.

Strike

This is the method of stamping or imprinting a drawing or a symbol onto a blank.  Depending on the coin’s design, it can either have weak or strong strike. An example of this would be the “Type II gold dollar” on which both sides (front and back) have the highest strike that is perfectly aligned, meaning, these designs require weak strikes. Generally the strike is not a key factor in establishing the coin’s grade except when it is included in a series where the value is connected to strike.

Preservation of the coin’s surface

The number of coin marks as well as where they are placed is a significant element in establishing the grade. While there is no fixed formula on the number of coin marks that sets its grade, there are several regulated standards regarding the significance of the location or positioning of a scratch. For instance, a coin having a deep scratch that it is not easily visible on its reverse (back) side will not be strictly penalized. However, if the same scratch was positioned on a noticeable or obvious central point on the front, such as the cheek on the Statue of Liberty, it would be penalized  much more.

Patina or luster

A coin can have a variation of textures on the surface, influenced by design, the metal that was used and the “mint of origin”.  Textures can include frosty, satiny, proof-like and semi-proof-like. When examining the coin’s surface in terms of grade, two things should be looked at; the quantity, or what is left of the original skin (has to be intact), and the location and amount of marks. Luster is important especially when determining whether a coin is either circulated or uncirculated.  A coin in Mint State technically; is free of abrasion and wear and must not have significant breaks in its luster.

Color of the coin

This is a very subjective element in determining coin grade. For instance, a “gold coin” showing dark green-gold pigmentation may be unattractive to one collector and attractive to another. As gold is moderately an inert metal, it is not prone to much color variance as copper or silver. Although wide ranging colors may exist in gold coins. Almost all of US gold coins had been dipped or cleaned, therefore not anymore displaying their original color. As coin collectors become knowledgeable, most of them are attracted and fascinated to coins having their natural color. In most coin series, it is nearly impossible to discover original coin pieces.

Eye attraction or appeal of the coin

Color, luster, strike and surface marks come together, comprises “eye appeal”.  Note that a coin having superior “eye appeal” can be strong in one aspect, such as possessing exceptional luster but not quite as strong in another aspect, such as not so good color. A coin that is undesirable in one aspect yet good enough in all the other aspects can still be distinguished as “below average” in “eye appeal”.