Mar 7th 2020, Silver Chartbook – Back to basics

Back to basics

As extraordinary events happen in global markets right now, conflicting fundamental data can be hard to decipher. We had pandemics before. 1889 Russian flu pandemic, 1918 Spanish flue pandemic. 1957 Asian Flue Pandemic, 1968 Hong Kong flue pandemic and 2009 H1N1 flue pandemic. Unfortunately, historical data on how the markets reacted seems in-congruent. We also find ourselves in a unique situation right now just from a financial market perspective itself, so it isn’t always wise to take past data and assume a repetition. Once the mind gets data overload it desires logic and order that much, that it will pick almost randomly any cause and effect model that might make sense. The relief felt is easily expanded on. That doesn’t mean, that this stream of thought is principle based. Neither, that it provides the edge needed for decision making if and when to participate in the markets. Back to basics.

A backup protocol is required.

Charts are for the most parts an accurate reflection of all data, encompassing perception of all market speculators as a sum. It is a good foundation to regroup by simply starting from scratch. Watch a top down (in time frame) very basic set of charts. There are no comprehensive indicator setups neither a complex strategy approach.

Silver Monthly Chart – Good Setup:

Silver in US Dollar, monthly chart as of March 6th, 2020

Silver in US Dollar, monthly chart as of March 6th, 2020

Back to basics:

From 2011 to the end of 2014 prices declined in a down trend fashion.

From 2015 to 2019 the silver market traded sideways. Within its sideways channel in that time frame it built a bullish double bottom reversal pattern.

The monthly chart depicts near the price US$16 a good support zone of supply. This allows for the aggressive monthly time frame player a good risk reward ratio for a long play with a tight stop.

 



 

Silver Weekly Chart – Sideways:

Silver in US Dollar, weekly chart as of March 6th, 2020

Silver in US Dollar, weekly chart as of March 6th, 2020

The weekly time frame shows clearly a sideways channel. With prices trading in the middle of the range, even with slightly bullish consensus, there is no setup for a low risk entry point just now.

We frequently post lower time fame charts and trade setups in real time in our telegram channel. From a risk perspective due to the recent volatility however, we do not recommend to trade smaller time frames with full position size right now.

Back to basics

It sounds all very simple but we recognize that most find it hard to follow such a simple approach in challenging times like these. The mind is to wound up.

Take a brief break and a walk around the house at a quiet moment without opinions. Take a few deep breathes. Try to shed yourself from the daily turmoil, where one fears not only for ones financial security, but may be also for ones health.

Once behind the screens, if there isn’t a setup clearly jumping out at you, simply walk away from further in depth analysis. Regroup.

Paper trade and plan future setup possibilities. Find that core confident spot where you have a knowing that the trade will come to you and not you having to chase a trade.

We post real time entries and exits for the silver market in our telegram channel. Follow us in our telegram channel.

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About the Author:

Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent.Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

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