The good news is: You do not need to know how the future unfolds to preserve your wealth. And Silver eats doubt for breakfast.
Silver prices will continue to rise. Why are we so sure about this? Unlike most who try to gain clarity about how the future might look like, we instead eliminate all scenarios where Silver prices wouldn’t be rising. Even if you are not a specialist in trading fundamentals, by now, it intuitively feels just wrong that central banks put this much freshly printed currency into circulation. Historically, precious metals are the most common safe haven in times of trouble and doubt. This will be no different this time around.
Silver in US-Dollar, Weekly Chart, Last week’s chart:
Silver in US-Dollar, weekly chart as of April 29th, 2021.
In last week´s publication, we posted the above chart with this comment:
“We identified the slightly higher probability of prices to advance immediately since we overcame a distribution zone marked with a dark green horizontal line, which now serves as support.”
…and spot on we were:
Silver in US-Dollar, Weekly Chart, Like we hoped:
Silver in US-Dollar, weekly chart as of May 6th, 2021.
While these weekly charts might appear somewhat similar, something significant has happened. The following the daily chart shows this more clearly.
Silver in US-Dollar, Daily Chart, Resistance penetration:
Silver in US-Dollar, daily chart as of May 6th, 2021.
Zooming into the smaller time frame, we can see the significance of last week’s price movement. Not only did the POC (point of control) support supply zone based on volume transaction (green horizontal line) get cemented by three rejected candle wicks, but the original breakout through significant resistance at US$26.55 all the way to prices above US$$27 paves the way to further advances.
Gold in US-Dollar, Monthly Chart, When to cash in some chips:
Gold in US-Dollar, monthly chart as of May 6th, 2021.
While entries are essential for risk minimization, exits distinguish the good trader. They should be as such the true focus in one’s trading approach.
Looking at the Gold chart above, the leader of the precious metal sector and as such followed by Silver shows a clear seasonal pattern. We identified a high probability for precious metal prices peaking in the first week of September and will, as such, take partial profits (see our quad exit strategy) at that time from our Silver holdings.
Silver eats doubt for breakfast:
Our mind craves certainties in an uncertain world and even more when predicting an unknown future. It is the process of accepting these uncertainties and applying principles of wealth preservation that supports the outcome of sound investment strategies.
One of these principles is the process of elimination. We were asking if there is a scenario where Silver wouldn’t rise, which is much more fruitful than trying to predict a precise model of the future. We literally couldn’t come up with a scenario that would work against the Silver price advance over the long term.
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By Korbinian Koller|May 7th, 2021|Tags: Gold, low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 Comments
About the Author: Korbinian Koller
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.