Silver is a sought-after precious metal with high demand and a steadily increasing price. Even though it's no longer used as a currency like in previous times, today it’s seen as a reliable store of value and offers an array of industrial use cases and potential.
As a result, trade in silver has been rising with it now becoming 0.15% of global trade volume. Silver exports are also seeing an increase with record growth recorded at 43% between 2019 and 2020. This resulted in a financial increase from $17.5 billion to $25.2 billion.
Such growth figures indicate that trading silver can be a highly rewarding venture. Keep reading to learn more about the commodity and how to start trading it with ISA Bullion.
Trading silver online involves speculating on the price of silver markets and executing instant trades for financial gains. Traders usually profit from price movements.
Compared to conventional investment methods, silver trading involves buying physical bars and coins and trading them at higher prices.
Traders have generally used silver as an investment safety net because it also serves as an inflation hedge. This is because its value increases with unstable market situations. It’s also perfect for portfolio diversification due to its inverse relationship with the US dollar.
So if the dollar is going down, you can expect Silver to go up resulting in a profit.
If you’re looking for a platform where you’d like to trade Gold or Silver with ease, look no further than the ISA Bullion app. You can make instant spot trades on the ISA Bullion app in just 4 easy steps!
You have to choose between creating a personal or corporate account. If you wish to create a personal account, simply add the required information along with relevant documents and send it for approval.
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For corporate account: Simply add the required information along with relevant documents + professional details and send for approval.
You need to fund your account before you start trading. You can add funds through your credit or debit card among other options. You can also use your gold deposits to set up your finances.
After getting account approval and adding funds, you are all set to make your first trade. With ISA Bullion’s secure platform, you can execute instant transactions without the fear of any compromise.
After each successful transaction, you can track your finances using our Trading App. It comes packed with contemporary features built to make your investment transactions instant, profitable and secure.
Start trading Silver on the ISA Bullion App by following these steps:
The process of executing trades with ISA Bullion is very simple and takes only a minute. Transactions are real-time, and profits are locked instantly. If you want to get started today, simply download ISA bullion’s mobile app for Android & Apple from here now.
You have a reliable trading platform but need to understand how the market works. Here are some factors that affect commodity prices when trading silver:
Precious metals have a unique reaction to the laws of demand and supply. They're always in high demand because supply is limited. That said, silver's demand is always high due to its widespread industrial uses.
Since it is the most conductive metal, it’s often used in medical equipment and other industrial products. During an economic recession, silver's industrial demand may decrease. But, its investment value always increases as a hedge.
Regarding supply, most silver is consumed during the fabrication process. This limits the supply amount that can be returned to the market. It also prevents the future supply of metal for trading and investment.
In periods of financial uncertainty, investors look for ways to secure their finances. First, it's done to find better returns as the government lowers interest rates. This is done to encourage consumer spending. The downside of these policy changes is that inflation is also bound to rise.
As inflation rises, the purchasing power of paper money keeps dropping. Investors use Silver as a hedge against the losses from currency depreciation. As the dollar keeps weakening, the demand for silver keeps growing. Its increase is usually due to the traders vying to diversify their portfolios.
There are many strategies to use for trading silver. But, you must choose one that aligns with current market conditions. For example, you can use a range trading strategy if the market is in a range-bound state. You can also use a trend trading strategy if it's in a trending phase.
This strategy involves using technical indicators to determine the market's movement. It's based on the idea that markets have an element of unpredictability. Therefore, traders can predict what will happen by analyzing historical trends and price movements.
The trend ranges from mid to long-term but spans any timeframe. It depends on how long the trend lasts. You can use these steps to set up your trend trading strategy:
A trending market is prone to reaching new extremes. An uptrend is characterized by a mix of higher highs and lower lows. A strong downward trend has a mix of lower lows and lower highs.
Understanding the trend's direction comes down to finding the appropriate time frame. You can use short-term charts to determine the potential entry and exit signals. A trendline can also be used to know the trend's direction. The presence of an upward trend is confirmed with three touching points.
Once you’ve identified the direction, the next step is to find potential entry signals. You can do these using technical indicators like the Relative Strength Index. It’s a momentum oscillator that shows when an instrument is overbought or oversold. When the RSI goes above 70, it’s seen as overbought. When it goes below 30, it’s seen as oversold.
Risk management is a vital part of your silver trading journey. For example, you can follow the one percent rule where you don't put more than 1% of your capital on a single trade. Also, consider diversifying your investment across different areas. This includes the industrial sector, geographic region and market capitalization.
This trading strategy comes in handy when the silver market goes sideways. You can set it up using these steps:
It means prices are reaching similar levels when the price action is in a range-bound state. This is known as consolidation. You can determine the range using support and resistance levels. This is done to identify upper and lower limits.
A support zone can be set up by connecting a series of lows. Also, you can set up a resistance zone by connecting a series of highs.
If the silver price goes to the bottom of the range, it’s the perfect time to buy silver. You can sell silver when the price moves to the higher section of the range. It’s also possible to lose tight stop losses when trading silver. This strategy lets you risk less and aim for a higher risk-reward ratio.
You need to be ready when the silver price exceeds the support and resistance levels. When this happens, you can use stop-losses and take-profits. These help you to determine the risk-reward ratio. This lets you know if a trade is worth it before investing.
If you sell the silver at the resistance level, the stop loss can be placed above it. Likewise, you should place the stop loss below the support level if you buy silver.
You can use these steps to make your silver trading journey easier:
There are many silver markets available for speculation, including:
Silver bullion: This is the traditional silver investment technique. You need to buy actual bars and coins that must be stored and insured. You can buy actual Silver Bullion from ISA Bullion by making an account with us.
Spot silver: The spot price is the price of silver at a particular point. Buying it means the asset can be exchanged and delivered immediately. This market lets traders get price exposure without owning the commodity. They can then sell the commodity once it reaches a predicted price point and make a profit.
This is a highly lucrative trading style and can be done directly via the ISA Bullion app. To start spot trading → sign up with ISA Bullion today.
You can track the relationship between gold and silver using the gold-silver ratio. It shows the amount of silver you need to buy for an ounce of gold. For instance, if the ratio is 20-1, it would take 20 ounces of silver to buy an ounce of gold. The ratio will get narrow if the silver value goes up and vice versa/
The ratio changes are a good indicator of opportunities to buy silver. A high ratio means it’s a good time to buy silver because it is cheaper than gold. That said, the price ratio is no longer fixed and is based on the uses of each commodity.
Many factors determine silver's value. Of course, demand and supply are the lead drivers, but their daily use is also a key factor. For example, the properties of the metal make it conductive and anti-bacterial. So, it's used in LED chips, batteries, water purification, dentistry and medicine.
Economic performance and political stability affect the commodity's worth. In periods of economic growth, silver reduces in value as investors turn to other assets. There's also increased demand from consumers who need luxury goods like jewelry.
But, silver retains its value in periods of economic decline. This makes it the first choice for investors as opposed to paper currencies.
After reading the blog, we believe you're ready to trade Silver with our suggested techniques. But you need the right platform to advance your trading portfolio.
At ISA Bullion, we’re committed to providing the best access to Gold & Silver trading instantly. So, start trading your physical silver bullion today and reap the benefits of having a precious commodity in your portfolio.
So open an account today and improve your finances by trading silver. To start trading commodities, download the ISA Bullion app for iOS and Android from here.