The ultimate question and its answer
With US elections looming many ask:”How deep will the retracement be? At what price do I purchase my physical silver?” If you think of it, this question is universal. In principle, it has no answer. No one can tell you if and by how much prices might retrace from current levels. That doesn’t mean there aren’t answers that solve the riddle principle-based. The ultimate question and its answer.
First, one has to admit that a question like this comes from a place of fear.
- Fear of missing out (what if prices go higher from here and I am not exposed to the market).
- Fear of being wrong (I do not know at what price to buy, what if I buy too early).
- Afraid of a loss (What if I buy too early and get stopped out).
And the question also stems from greed (I want in, I want to buy cheap).
It is important to be aware of these origins since overcoming those is what’s needed for proper execution and trade/investment management.
- To overcome the fear of missing out, all you need is to purchase some silver. It doesn’t have to be a lot. Just enough that this feeling of standing on the sidelines subsides, enough to follow the market and have your interest satisfied.
- To overcome the fear of being wrong, you need to accept that there is no way to be right since an individual trade is random in its outcome and it is impossible to guarantee to be right. You as a trader are not in the business of being right, you are in the business of executing an edge well in a field of probabilities.
- The fear of loss is overcome by simply trading that small that you can accept the loss. A trade has to be that meaningless to you otherwise you have no chance of good execution. Over time, this amount will increase with the confidence gained.
Historically, we had Gold/Silver-ratios of 14 in the 1980ies, compared to 82 right now, but we see today’s world economic crisis unravel in a much more dramatic scenario. We have increased demand in cell phones, TVs, refrigeration, electric cars and solar panels for Silver. In addition, recycling Silver is extremely difficult and as such supply is diminished. These among other factors make us confident to predict future silver price levels in the triple digits.
Therefore, does it matter if you purchase at US$25, US$22, or US$19? Or does it matter more to at least have a very small position and build upon this position? In other words, less greed and less focus on entry perfectionism (perfection is paralysis) and rather focus on exits and position building over time.
You want to minimize risk but not by picking the ultimate entry point but rather by applying smart techniques like our quad exit strategy. And all this of course based on good money management to achieve your goals and not to satisfy your limiting emotions.
Silver, Monthly Chart, Dark cloud cover:
With a dark cloud cover candlestick formation on the monthly chart at this point, anybody who bought Silver in August is now holding a losing position.
Nevertheless, we personally find it attractive to think here about accumulating some physical Silver purchases!
Silver, Weekly Chart, Triangle break:
From a weekly timing perspective, there is also no need to step in aggressively just yet on anything besides physical purchase market participation. With a successful triangle break prices most likely need to settle in a temporary sideways zone before the next upleg.
Silver, Daily Chart, At support:
We get a bounce here near the fractal support zone (in green) overlapping a direction support resistance line. Low risk entries are right here.
The ultimate question and its answer:
Asking for the ideal spot to pick tops and bottoms is futile. You will rarely pick that spot and most likely find yourself in an emotional scarcity loop if you aim for that perfection. The worst behavior in trading is to succumb to your emotions. Acting upon fear-based impulses will not produce the desired winners you seek after.
What most try to achieve, after a career of emotionally driven losses, is to replace emotions with logic and discipline. Another dead end. As humans we are emotional and we learn from our emotions. The trick is to replace scarcity motivated action by replacing them with abundant sourced emotions. Emotions that truly guide you through the labyrinth of a counter intuitive environment and provide the lessons necessary to constantly evolve and improve skills.
We post real time entries and exits for the silver market in our free Telegram channel.
If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.