Apr 13th 2019, Silver Chartbook

One step up

Two weeks ago we advised not to be tempted to go long with $15 as a large number support. That was good advise, since we now broke that support, without much advancements in between. Last week we warned about the “megaphone formation” and again spared those, who heed our advice, disappointing losses. Cash is king since it allows for action when the time is right. While time passed, the larger time frame picture changed. “One step up” in time frame allows for participation, without the risk of the “noise” that lower time frame participants often battle with.

Megaphone formation starting two weeks ago:

Silver in US Dollar, daily chart as of April 6th 2019

Silver in US Dollar, daily chart as of April 6th 2019

More of the same after another week of trading:

Silver in US Dollar, daily chart as of April 13th 2019

Silver in US Dollar, daily chart as of April 13th 2019

During the up creep that started on April 29th and went until April 9th, daily players were tempted again and again to take a short position. For those who followed their intuition of these feelings, a painful route of stops taken out shortly thereafter was the “reward”. Long players had no different experience.

When in doubt, we as humans, find resource in our intuitions. The market, being counter intuitive in nature, rewards such behavior with constant losses. This is the principle reason why market participants do not create random results. Incorrectly trained traders and investors have very consistent loosing streaks due to this phenomenon!

As the underlying emotions, which create this doubt, get magnified the closer the price movement is coming (lower time frames). Therefore, the remedy is simply “One step up”.

Weekly opportunity:

Silver in US Dollar, weekly chart as of April 13th 2019

Silver in US Dollar, weekly chart as of April 13th 2019

While perception battles about the long and the short side on daily time frames caused recently much “noise”, the weekly chart shows now clear opportunity within reach.

Zone A price penetration between $14.80 and $14.64 would allow for a small weekly long position. Entries in that region show great risk reward potential towards recent monthly highs ($16.18).

Zone B price penetration ($14.64 to $14.46) would allow a more aggressive position sizing, as it is providing good support and excellent reward probabilities.

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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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