Silver Trading Strategies
Silver has been used as currency, for jewelry, and as a long-term investment option for many years.
Various silver-based instruments are available today as trading and investment options. Silver Trading Strategies.
These instruments include silver futures, silver options, silver ETFs, or OTC products like mutual funds based on silver.
Nowadays, silver is a highly tradeable asset because of its high trading volumes and tight spreads.
In fact, silver trades with clear chart patterns due to its high liquidity. Silver Trading Strategies.
However, intraday traders enjoy the fact that silver has been more volatile than gold during the past due to it being a smaller market in comparison.
This volatility of silver allows them to take advantage of big intra-day market swings.
Silver Trading Strategies
The major reasons to trade silver are:
Diversification
However, the presence of the Silver commodity in an equity-only portfolio can lower the volatility, due to the absence of a correlation between the metal and other asset classes. Silver Trading Strategies.
Safe Haven
In fact, commodities can serve as a safe haven in the times of global economic uncertainty and market turbulence, because they can retain their value.
Inflation Hedging
Commodities’ intrinsic value is independent of currencies.
Silver Trading Strategies.
This types of commodities will often hold their value, even if a currency falls during the period of inflation.
Speculation on silver prices
Some commodities may be highly volatile, experiencing wild price swings. Silver Trading Strategies
However, trading silver CFDs is one way to try and profit from drastic silver price fluctuations.
Trading of silver requires some analysis, due to the market’s occasional high volatility and a wide choice of available instruments, from silver derivatives, such as futures and CFDs, to silver mining company stocks.
Sometimes, trading silver can be extremely volatile resulting in a high degree of risk.
In fact, the chance of making large profits goes hand in hand with the risk of large losses.
Silver Trading Strategies
In fact, it is not long ago that silver has become a highly sought-after commodity in the trading markets.
Previously, many traders mainly focused on gold. Silver Trading Strategies.
However, the rising prices of gold have convinced many traders to spread their risk over other investment options in terms of precious metals. Silver Trading Strategies.
It is true that the market for silver is highly volatile compared to gold, but this metal offers an equally impressive shield against inflation and market fluctuations as gold. Silver Trading Strategies
The positive point is that it does so at a lower price compared to gold.
Another reason why silver becomes very popular is that 50% of the demand for silver is constituted of industrial demand.
This means that even if the investment market goes down, silver can always be sold to industries.
How to trade Silver with CFDs?
One of the easiest and most popular ways to trade silver is with the contract for difference (CFD). Silver Trading Strategies
A contract for difference (CFD) means is a type of contract between a trader and a broker in order to try and profit from the price difference between opening and closing the trade.
Investing in the silver contract for difference (CFD) saves you the inconvenience of paying for silver storage.
In addition, contract for difference (CFD) gives you the opportunity to trade Silver in both directions.
No matter if you have a positive or negative view of the silver price forecast and predictions, you can try to profit from either the upwards or downward future movement of the price. Silver Trading Strategies
Moreover, trading silver through the contract for difference(CFD) is often commission-free, with brokers making a small profit from the spread.
Silver Trading Strategies
There are a number of silver trading strategies, but Trend Trading and Range Trading tend to be the most popular among traders of all levels which are explained below:
Trend trading strategy
Trend trading is a three-step process that consists :
- Determining the trend of the Market.
- The second Step is filtering your signals in the direction of the trend.
- Third Step is setting stop-losses and take more profits.
1) Determining the trend
However, a trending market is one that is consistently making new price extremes.
For example, an uptrend can be seen by identifying a series of some higher highs and higher lows.
A down-trend market is identified with a series of lower highs and also lower lows.
Trading of silver can be made easier when you understand the benefits of the trend trading.
There are some different techniques to determine the direction of a trend like drawing trend lines or using moving averages. Silver Trading Strategies.
In fact, below is an example of how the same trend was identified using three different methods.
When you are determining trend direction of silver for trading you can use any of these methods, but you don’t have to use them all. Silver Trading Strategies.
First, you have to notice how silver prices are making a series of higher highs and higher lows.
Secondly, you have to notice how prices have remained above a support trend line.
Silver Trading Strategies
The Second Step of Trend Trading is:
2) The second Step is filtering your signal in the direction of the trend
There are many tools traders uses to identify buy and sell signals in the market when trading silver or any other asset.
Trend lines are a popular tool that can be an effective indicator of buy or sell signals in the market.
Additionally, there are four identified trading indicators that every trader should be familiar with, including the Simple Moving Average.
RSI (Relative Strength Index), Stochastic, and MACD (Moving Average Convergence Divergence).
Normally, traders should pick an indicator they understand and are comfortable with, and then only trade those signals that generate in the direction of the trend.
There are many different methods available to determining signals, the key to trend trading is to filter those signals and only take trades in the direction of the trend.3).
The Third step is setting stop-losses and take profits.
One of the most important habits of successful silver traders is their ability of risk management.
However, using stop-losses and take profits is essential to manage risk.
Silver Trading Strategies
It aims at leveling the chance so the chance of earning a loss equals that of earning cash in on the trade.
Although it’s not ideal, hedging will lower risk to an excellent extent. Silver Trading Strategies.
If used sagely it will flip AN unfavorable outcome in your favor permitting you to earn an internet gain from the trade. Silver Trading Strategies.
There area unit 2 basic sorts of hedging in forex market – direct and indirect hedging strategy. Here we are going to reveal a lot of concerning these hedging methods.
Direct hedging permits you to put a similar forex hedge strategy on a silver currency try.
Silver Trading Strategies
Infobahn profit you earn from the trade remains zero as long as you have got each trades open at a similar time.
In order to create a right away hedging, you purchase a currency try and so at a similar time sell a similar try within the forex market.
If you time the market well, you’ll even create extra money from the trade while not acquisition further risk from the trade. Silver Trading Strategies.
It is an easy forex hedging strategy that enables you to require another way of your initial trade while not closing the account each the mercantilism account remains open.
