Hi ho silver …how low can you go!

Silver futures - monthly chart
Silver futures – monthly chart

For silver investors, and those who rushed headlong into buying when silver prices hit the $50 per ounce price point, it is perhaps the monthly chart which makes depressing reading, with the meteoric rise now reflected in an equally dramatic fall, and mirroring what has happened which in the price of gold. The monthly silver chart also defines the various key levels which have either helped or hindered the metal’s progress lower. The first of these developed in the $21.80 per ounce region as the commodity moved into a well developed phase of price congestion early in 2014, before finally breaking lower towards the end of the year, before moving through the platform of support in the $18.40 per ounce region, as denoted by the blue dotted line. From November onwards, and until last month, the ceiling of resistance was duly built and tested but which to date has held firm, confirming the heavily bearish picture for silver.

So far this month this bearish tone has once again been confirmed with the metal moving well away from this region, and down to test a deep and substantial platform of potential support in the $14.20 per ounce area, as denoted with the blue dotted line. In trading today, this level is now under threat with silver trading at 14.41 per ounce at time of writing, and should the $14.00 per ounce area fail to hold, then like gold, a sustained move lower is likely to develop, with a test of the next platform of support at $10 per ounce. How the mighty have fallen, and like gold, unpleasant reading for any longer term silver investors. As always, the time to buy again for investors will be signalled through the prism of volume but for speculative traders VPA (volume price analysis) is the perfect approach to confirming intraday moves, both long and short.

By Anna Coulling

Charts are from NinjaTrader and the trading indicators from Quantum Trading.

 

About Anna 1030 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

3 Comments on Hi ho silver …how low can you go!

  1. Hi Anna, I have a BIG problem with MT4. First is what happened to me recently is that I place an order before the news came out in the right direction, however MT4 closed my position like if it hit a stop loss but it did not. Today happened to me something similar with take profit order. My order on EURJPY today was SELL at 136.830 (9:08 AM) with my TP placed at 136.196. The market went down to 136.173 but MT4 did not close my position, I had it to close myself when I came back home however it was too late. What should I do, my broker offers only MT4?

    • Hi James – many thanks for writing and I’m sorry to hear that you are having problems with your MT4 broker. I’m not sure if this a live account or a demo account, but if it is live I would certainly consider changing your broker and the site I always recommend is 100forexbrokers.com where you will find all the major brokers listed as well as the type and information on the data feeds etc. My suggestion would be to look for an ECN or STP broker where your orders are transmitted directly to the market and not through a dealing desk type/market maker broker. The other alternative is to move to another platform such as NinjaTrader or Tradestation who both offer brokerage options for fx trading so you can run the platform and brokerage account in parallel. With Ninjatrader you would also need a data feed such as Kinetick. The other alternative is to move to a broker such as Interactive Brokers, which is one I use where you pay a small commission for all order execution, and then have the choice of platform/charting etc. Whilst MT4 is a great platform you do need to choose your broker with care, and whilst it is ‘free’ the commissions are wrapped into the spread as there is never a free lunch I’m afraid:-) Hope the above helps and wishing you every success and thanks once again – Anna

      • Thanks. One more thing, in the forex market is it the same like in stocks where the counterparty is another trader? I know that if a broker has a DD that he is the counterparty but what about STP or ECN? And how is it that there is always somebody looking to trade the other side of my position?

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