During economic slumps, although the demand for physical silver as an industrial item may decrease, the demand for it as an investment often increases, resulting in an increase in price. As far as supply is concerned, a majority of industrial silver is either consumed or destroyed during the fabrication process, limiting the supply that can be returned to the market upon completion of the industrial cycle and potentially hindering future supply of the metal.
By applying the RSI to the daily chart above, a potential entry signal may exist at the highlighted areas below 30, where silver is considered to be in oversold territory., risk management is front and center as this is one of the few factors that a trader actually has in their control. This is also derived from data, featured in our Traits of Successful Traders research. Point blank – no trader will even be able to accurately predict the future much less in a perfect manner.
The silver two-hour chart below demonstrates how a trader may determine the range when the market is in a period of consolidation.If the silver price moves to the bottom of the range, traders could look to buy silver and could look to sell silver when the price moves to the higher end of the range. An advantage of a range trading strategy is that a trader can use tight stop-losses.
Although hundreds of indicators exist, each with unique characteristics, the use of one or two simple indicators is often sufficient.However, price action is also useful guide for traders, with Fibonacci levels guiding support and resistance. An example of how the Fibonacci retracement can be used for technical analysis can be seen in the silver chart below, where the Fibonacci retracement is taken from two relevant points .
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