Aside from being one of the most precious metals in the world, silver is also a famous trading commodity. This exquisite metal has existed for centuries and has been treasured by humans because of its many purposes.
Silver has been turned into jewelry, a form of currency, and a crucial raw material in global commerce and independent investments. Like gold, silver is extremely attractive to investors because of its value and safeguard appeal, making it a great trading commodity.
Silver reached its peak high level in April 2011, where it hit 49.760USD per ounce. Just like any trading commodity, its value can be affected by socio-political events which make it experience a lot of ups and downs as well. It is critical to analyze past silver prices so you can have an idea about the future prices and important key factors to watch out for. The ticker symbol for Silver is XAG, where X stands for Index while AG represents the chemical symbol of the metal.
How you can trade silver?
When trading silver, you trade the underlying asset’s real time price movement. This trading method is known as CFD or Contract for Difference.
Through physical silver
You can trade silver by purchasing a quantity of it. Jewelry, for example, is a physical asset that you can hold onto until you want to trade or sell it on the market.
Through silver futures
Compared to physical silver, silver futures require some predicting skills. You can enter a contract if you believe that your price prediction is correct. You will then pay for the specific predicted price of the silver. The quantity of silver that you paid for in the contract will be delivered at the specific time or date in the future that you predicted to have high silver values.
With silver futures, you are aiming to trade or sell your physical silver assets for a price higher than what you initially paid for.
Through silver CFDs
With this trading method, you won’t have to buy any physical silver. Since CFDs are leveraged products, you can still trade real-time price developments even with a small amount of investment. That amount can already give you ample exposure to the underlying trade. However, do take note that your profits or losses are calculated based on the whole size of the trade position. This can magnify both your profits and losses.
In terms of trading strategies, silver trading does not differ much from other trading commodities. You have to find the best trading strategy for you because no strategy is one size fits all – nothing will guarantee you immediate success. After determining your financial goals and trading capabilities, choose from these four proven strategies used in trading silver:
Scalping
This trading strategy lets you profit from various small price changes. Scalping usually has a super short-term timeframe, with a holding period lasting from seconds to a maxim of an hour. If you will use this strategy, you should have a strong exit strategy because even just one big loss, all your small gains can easily get flushed down the drain.
Swing trading
If you are looking for a trading strategy that has a medium time frame and you can withstand a holding period lasting for a few days to a week, then swing trading is for you. This will let you profit from anticipated price movements, but you might get exposed to overnight and weekend risks. The price of your trading commodity can have a huge gap, with the following trading session opening at a significantly different value.
Day trading
This is a trading strategy that has a short-term timeframe and a typical holding period of a day. Day trading means you will only buy or sell on the same day or multiple times throughout the day.
Position trading
Also known as trend trading, traders who utilize this strategy will buy a commodity and will hold onto it until a trend reaches its peak. With that, a position trading strategy has a long to super long timeframe, with a typical holding period that lasts from weeks to months. If you want to use this strategy, you can utilize technical analysis, fundamental analysis, or both for your trading decisions.
Similar to any metal trading commodity, you can profit a lot from silver and its value. It can also be your safe haven in trading. You can buy a physical raw material or trade the silver’s real time price movement. If you’re ready to trade silver, CXM Direct offers the best pricing in metal trading and an advantageous trading environment. Build your metals-based portfolio with us today and enjoy multiple trading privileges!
