July 13th 2019, Silver Chartbook

Silver – What to expect long term

Not all concepts in financial markets are complex. It is always the simple reduction of things, that are convincing. It requires expansion first to be able to reduce, but once in alignment less is more. Allow us in this week’s chartbook to expand on this notion and merely demonstrate why a long play in the silver market has a probable, favorable outcome. Silver – What to expect long term.

Monthly chart of silver  7/12/2019, sideways trading periods:

Silver in US-Dollar, monthly chart as of July 12th, 2019

Silver in US-Dollar, monthly chart as of July 12th, 2019

The chart you are looking at above, presents the last twenty year of silver trading behavior. Each single candle stick counts for one months length of price fluctuation. Horizontal yellow lines mark sideways trading periods. We aim to illustrate that like in many other markets these times dominate in length market play.

Silver – What to expect long term: July 12th 2019, Silver, directional moves:

Silver in US-Dollar, monthly chart as of July 12th, 2019 b

Silver in US-Dollar, monthly chart as of July 12th, 2019 b

In opposition to the first chart presented, this chart even so the same time frame, illustrates exactly the opposite. Vertical yellow lines show the time segments in which prices expanded or retracted, prices were trading directional in nature. We aim to show, that the mere time segments, where actual meaningful price change manifested, was in time duration a lot shorter in period than the sideways trading segments of the previous chart depicted.

Silver – monthly chart – 7/12/2019, where we at and what to expect:

Silver - What to expect long term Silver in US-Dollar, monthly chart as of July 12th, 2019 c

Silver in US-Dollar, monthly chart as of July 12th, 2019 c

Putting it all together one could say, that after a time of congested sideways movements, directional move becomes imminent. Where an edge can be extracted is, that silver has been just in such a congested phase for a while. But that is not all.

Silver – What to expect long term: The risk/reward edge –  monthly chart of Silver July 12th 2019:

Silver - What to expect long term: Silver in US-Dollar, monthly chart as of July 12th, 2019 d

Silver in US-Dollar, monthly chart as of July 12th, 2019 d

The last time, about ten years ago, silver was trading within these price ranges, a substantial move came as a result of prior congestion. Now we could go into lengthy discussions about technical reasons and fundamental reasons, and all sorts of stacked edges like the ones we discussed in prior chartbooks about silver of why we are bullish on silver. But we promised this time around not to make things complicated. If you think of it, we don’t need to.

Looking at the risk to reward probability, graphically depicted in the above chart, isn’t it fair to say that if only once in a while a play like this works out, it will take care of a few small loosing trades along the way.

And isn’t it fair to say that most likely there will be still a fair chunk of profits left, even if the number of times one would be wrong, would outweigh the hit rate of the winners. One could still come out ahead.

So why not try on a trade like this one.

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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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