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TFC Commodity Trading Forum

Re: Trades - Thanks for the chart/Harold *PIC*

No problem. I didn't mean to imply that you buy every plunging gaping down market just because it is reaching a support area. Here is Dec Silver again. Notice Silver has a very high beta so price support and resistance levels are more a 'price area" than actual exact price points. See how $39 was resistance in May and was cleared in July with a breakout but on the August retest of this breakout point price actually came down to $37 briefly. So Silver will always overshoot and undershoot support and resistance points. No way you can use tight stops or even normal ones due to this characteristic. Right now price has come down through the '33 'area' and stopped at the early Jan high support at 31. Lots of previous price action from 26.50 to 31 and price isn't likely to simply blow through this easily. To safely trade Silver or other high beta and volatile markets you can use options so you don't have the margin calls and don't have to have perfect timing if there is a few days of overshoot. Or use wide stops knowing you will win big but also lose big at times when wrong. There was a lot of capitulation Friday looking at the high volume. A bounce back to the 33 price area would be typical from here. Margins were increased on Silver,Gold and Copper after the close Friday so watch price action Monday. A washout and then a rebound could occur with these Monday/Tuesday. But the chart doesn't suggest anymore plunging than has already occurred so watch Monday's price action for the reaction to the margin increase as a good guide as that should say a lot about the next move. The 26.50 to 31 price area should keep price in check for now as far as what the chart suggests.