Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

tjnoon

Anyone Trading Silver?

Recommended Posts

You hear a lot about gold these days and for good reason, for sure. And while I wouldn't knock the gold bugs, I think that silver is worth looking at. It has been a very profitable and consistent trade. I like following a 233 tick chart with the trade method I use but the problem is, that the risk parameters could be quite large so if one isn't adequately capitalized, it becomes too dangerous. Even the winniest trade strategies go through their tough sessions and you have to have the trade capital to get through the losses or you won't be left standing to take the next trade which, at the very moment you throw in the towel, will inevitably begin the next 10 trade winning streak. Murphy's Law, right?

 

BUT, there is a solution. You can successfully prosper from the nice price action in the silver market by using silver ETFs. AND, you can get good leverage by trading options in those markets. That's what I've been doing lately and I'm loving the results. But instead of daytrading, I'm using a 195 minute chart to put on short term swing trades. Below are a few screen shots of three different ways to trade silver.

 

The first screenshot is a recap of today's 233 tick chart. It was very profitable as it usually is BUT, each trade required a considerable amount of risk, at $50 per 1 cent move in the contract. To trade this strategy safely and with responsible risk allotment, you probably need a $50,000 account. Otherwise, you'll find yourself trading with scared money when you get a few losses and scared money is DEAD money. Lost money!

 

The 2nd chart, SLV (iShares Silver Trust), is a trade that I am currently in. It is a swing trade strategy that I like to trade with 4 positions. But rather than trade the shares outright, I am trading options with the nearest 'in the money' option to the entry price of the trade, as it is shown on the SLV 195 minute chart. I have already exited two positions and am letting the remaining positions play out until the trade ends. This strategy has won over 72% of its trades over the past two years. And, with options, you have great control over your risk and position size.

 

The 3rd chart is another Silver ETF, AGQ (ProShares Ultra Silver). This one also has won a very handsome 72.6% over the same two year period. Makes sense, right? This one trades at a completely different cadence however. I wanted to show this chart because there is a new trade that has set up and may trigger in soon. I would make a small adjustment to get above the swing level however. This one is a much higher stock price but with options, using the same strategy as I'm using with SLV, this is a very profitable strategy. Because there is so much time left with March options, the percentage returns are not as great as they would be later in the month. You could get better returns with Feb options but you might have to roll them over to March if the trade doesn't conclude in time. This setup could cancel but for now, the setup is valid and will be confirmed if the trade triggers in prior to cancelling. We'll see.

 

Regardless, silver is a market worth trading. It is steady and profitable. Check it out.

021111_si.thumb.gif.c9095812e4e46b12bbba78cc79e9c13c.gif

021111_slv.gif.efcd92ac596275487acdf8cf83a0bb8b.gif

021111_AGQ.thumb.gif.8f7bdc317f7631c81943b88bcd3d4013.gif

Share this post


Link to post
Share on other sites

A lot has happened since I posted the last time regarding Silver. I thought I would do a follow up and share with you today's blog post I put up in the Seven Summits Trader Blog. Notice where the price is today vs. the price on the trade examples above. This post also highlights a new setup that we are very keen on. It's worth taking a close look at because it is based on pure price action and continues to work across multiple markets and timeframes. You'll see the example in the post below.

 

Got Bob?

In yesterday's post, I showed you a GetB.o.B. trade that was forming on the iShares Silver Trust ETF, SLV. Did you get it? Today, we exited fixed positions at both the 2nd and 3rd targets and are now trailing the remainder of our position with guaranteed profits locked in. I personally Got B.o.B. (got back on board) using May 42 call options.

 

The entry was at 42.67 so I bought slightly in the money calls. The price for each call option was 2.24 each. I exited my first position when SLV hit its middle target at 43.56. That's an .89 gain on the straight ETF (stock), which is a 2% gain. Not bad for a quick trade but if you bought 100 shares per position, you'd have to commit a bunch of your trade capital. Still though, if you could make 2% on every trade, you could conceivably trade yourself to riches. Check out the options result though.

 

I exited my first position when the ETF hit its middle target. My options were now worth 2.75, which is a .51 gain. It's a smaller gain from a point total point of view but consider this. Each option only cost $224. When I exited with a $275 proceed, $51 profit per option, my percentage return on my invested capital was 23%! That's over 200% better and a 200% better use of my capital from a pure ROI (return on investment) basis.

 

The story gets better though. I exited the 2nd third of my position at the 3rd target of 43.93. The option sold at 2.90 (I actually exited a few pennies below the full target when it stalled at 43.90. I'm a firm believer of 'trading for profit' and not fighting over a few ticks). The 2nd position gained 29%. I tightend my stop on the 3rd, trailing part of the trade to give this a chance to hit a homerun. I have profit locked in no matter what, and in spirit of the SST, I have a pure risk free trade that is live and still going.

 

See SLV Chart with GetBob Trade Example; (You can see the setup from yesterday. Here is the current chart from today.)

042011_slv.gif.3c36b0b46765abbb281a3b15e2f3ec82.gif

041911_slvBob.thumb.gif.c671b2039c982df51fe4c195b4dfdb17.gif

Share this post


Link to post
Share on other sites

Silver has been the best trade for last 7 months, the following table makes the point...

 

Total return since August 27, 2010

Global Asset

140.4% Silver

75.1% Corn

39.0% Crude Oil

38.2% Russell 2000 Index (Broad Stock Market)

36.3% CRB Commodities Index

35.8% Coal

35.1% Soybeans

31.8% Nasdaq

30.1% Copper

27.2% S&P 500 (Large-Cap Stocks)

25.2% Dow Jones Average (Large-Cap Stocks)

21.1% Gold

18.3% Financial Sector SPDR Fund (Big Banks)

5.6% Producer Price Index

2.3% Consumer Price Index

-2.2% Investment Grade Corporate Bond Fund

-2.6% 10-Year U.S. Treasury Bond Total Return

-10.6% U.S. Dollar Index

 

In hindsight, in such a strong uptrend, do you think its better to simply buy & hold instead of actively trading it?

 

MMS

Share this post


Link to post
Share on other sites

Agree on Silver though the intraday volatility/trading range is what really makes it so much more tradeable than years past. It's one thing to have a larger overall percentage gain, but it's also the behavior intraday which I never would have considered a few years ago. Now with the much higher prices (throw Gold in there as well) it becomes highly tradeable for a daytrader.

Share this post


Link to post
Share on other sites
I am short silver at 49.030 looking for $30 by year end :)

 

wow you are a brave man shorting silver!! i'm still in the trade, took a beating today, but my horizon is probably a little longer than yours. if it does go to $30 i'm buying, long term the US dollar is done. best of luck with your short

 

MMS

Share this post


Link to post
Share on other sites
wow you are a brave man shorting silver!! i'm still in the trade, took a beating today, but my horizon is probably a little longer than yours. if it does go to $30 i'm buying, long term the US dollar is done. best of luck with your short

 

MMS

 

Hey thanks...can't believe it really. Biggest profit trade I have ever had. Today had some good profit, gave a little back, but really want it as a long term trade because I entered it that way. I can't take all the credit though...my advisor told me to do it haha:crap:

 

Here is a screenshot I had to make since I won't ever see this again off 2 contracts :D

silver_april_26_001.thumb.png.5c2435138c2b04e8166289d1008e9e95.png

Share this post


Link to post
Share on other sites

I recently closed out of some puts for a nice triple digit percent gain on both SLV and GLD. Not sure if I'll be getting long or short at this point. Waiting for my system to give me a set up.

Share this post


Link to post
Share on other sites

Been awhile since I posted here. I'm hoping to find a local dealer and snag some Silver after the fall from grace. Anybody in the Buffalo NY area with suggestions on dealers?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 23rd February 2024. Market Recap – Global Rally Pushing Valuations To Record Highs Across the US, Europe & Japan. Economic Indicators & Central Banks:   It was all about Nvidia. Nvidia got a $277 billion 1-day boost to its market capitalization yesterday – the biggest single-session increase in value ever!(the previous record was a $197 billion gain by Meta Platforms Inc.) Treasuries continued to lose ground, hurt by the surge in risk appetite with yields cheapening to the highest levels since late last year. The solid jobless claims report, which followed on the heels of the hawkish bent in the FOMC minutes, added to expectations the FOMC will leave rates in restrictive territory into June at least. A weaker than expected S&P Global services headline saw rates dip briefly. Japanese markets are closed for a public holiday. Fed Governor Christopher Waller: ”interest rate cuts should be delayed at least two more months, but indications of healthy demand and concerns over supplies could boost prices in the coming days.” Today: Germany IFO business climate & GDP, ECB publishes 1- and 3-Year inflation expectations survey. Market Trends:   Massive global rally in risk that saw the NASDAQ(USA100) jump 2.96% to 16,041.6, falling just short of the historic peak of 16,057 from November 2021. The S&P500 (USA500) climbed 2.1% to 5100, and the Dow (USA30) was up 1.18% to 39,069, both marking new records. Asian stock markets today continued to move higher, with the global rally pushing valuations to record highs across the US, Europe and Japan. The Nikkei jumped a further 2.2%. Financial Markets Performance:   The USDIndex was little changed at 103.80, below 104 for the first time since February 2. The Yen has performed the worst so far this year, experiencing a 6.3% decrease against the Dollar, as investors sought higher yields in other currencies, anticipating that Japan’s interest rates would remain close to zero for the foreseeable future. The Yen weakened against the Euro, Sterling, and other currencies this week, marking its 4th consecutive weekly decline against the US Dollar. USOil slipped to $77.85 per barrel after Fed speeches indicated delay to rate cuts. Gold dipped to $2021 per ounce. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • $LAMR Lamar Advertising stock nice breakout, frpm Stocks To Watch , see https://stockconsultant.com/?LAMR
    • Elevate your dating game with the top site for hassle-free connections. Authentic Maidens Top-notch Сasual Dating Superlative Сasual Dating
    • Date: 22nd February 2024. In-Depth Analysis – AUDUSD – Investors Expect Fed to Cut First! AUDUSD – Economists Do Not Expect the RBA to Cut Until 2024’s Third Quarter.   The Aussie Dollar increases 0.67% and sees its strongest gain this week so far. The exchange rate trades at its highest price since February 2nd. The FOMC’s Meeting Minutes indicate the Federal Reserve is not yet willing to cut interest rates. FOMC Members are cautious about cutting rates too fast. Australia’s Wage Price Index for the latest quarter continues to read higher than where the RBA would like to see it. The Reserve Bank of Australia advise the regulator would not consider cutting interest rates until the second half of 2024. The Australian Economy weakens but not enough to pressure the RBA! Inflation remains moderately higher than the US! AUDUSD – Technical Analysis The AUDUSD is witnessing one of the lowest spreads amongst the major currency pairs and is seeing higher levels of volatility. The Australian Dollar has been rising against the USD for seven consecutive days, similar to the NZD and the Euro. However, the AUD is performing better than the GBP, JPY and CHF against the Dollar. However, investors should note that the bullish price movement is largely being driven by the weakness in the Dollar. The US Dollar Index has fallen 0.50% this week and trades at a 3-week low. The Australian Dollar on the other hand is witnessing mainly bullish price movements depending on the currency pair. The Australian Dollar is increasing against the GBP, Euro, Yen, and the CHF but is declining against the NZD. So here we can see there are no major conflicts between the two individual currencies. However, investors will need to continue monitoring the US Dollar Index and price condition of the AUD against other major currencies. The AUDUSD is trading above the 75-Bar Exponential Moving Average and above the “Neutral” level on the RSI as well as the Bollinger Bands. These three factors indicate a further bullish trend as the asset is yet to be read “overbought” on most oscillators. In addition to this, the asset has managed to break above the resistance level and the previous high, meaning the continuation of the traditional wave pattern. The only negative indication when evaluating technical analysis is the measurements of the previous 4 impulse waves. The average bullish wave size is 0.87% and the largest has been 0.92%. The current impulse wave reads 0.87%. Therefore, if the pattern is to continue the price may retrace soon, even if it is going to continue rising thereafter. However, this cannot be known for sure. AUDUSD – Fundamental Analysis In the Meeting Minutes, representatives stated more fear about the remaining risks of a premature decline in rates than about a persistent period of high interest rates. Against this background, markets are reconsidering the timing of a possible easing of the regulator’s position in May and June. According to the CME Groups FedWatch Tool, the likelihood of a May adjustment is currently anticipated at 30-35%. A strong possibility is considered anything above 70%. Next week’s Core PCE Price Index will be key for the Dollar as this will be the last inflation reading for the month and short-term future. If the PCE Price Index is also higher, this means all 5 inflation readings beat expectations. As a result, the Dollar may rise. However, the Dollar’s issue is that the market’s risk profile is high, and many expect the Fed to cut first. Therefore, the Dollar may continue to struggle unless other central banks become more dovish. Even though the Reserve Bank of Australia’s interest rate is lower than the Fed’s, analysts expect the Fed to cut first. Even though GDP Growth in Australia is weakening, the economy is still performing better than Europe and the UK. In addition to this, inflation is still above 4.00%, which is extremely high for the Aussie and the Unemployment Rate has risen to 4.1% which is still manageable according to analysts there. Therefore, most analysts believe the RBA will cut in the third quarter and after the Fed. Therefore, fundamental analysis is slightly in the Aussie’s favor here, but technical analysis will need to continue signalling a rise. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • $GOOG Alphabet stock back to 143.09 triple+ support area with bullish stats, $GOOGL , see https://stockconsultant.com/?GOOG
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.