Three Ways to Trade Silver Using the SST

Silver, really?  You hear a lot about gold these days and for good reason, for sure.   And while I wouldn’t knock the gold bugs, I think that silver is worth looking at. It has been a very profitable and consistent trade. I like following a 233 tick chart with the trade method I use but the problem is, that the risk parameters could be quite large so if one isn’t adequately capitalized, it becomes too dangerous. Even the winniest trade strategies go through their tough sessions and you have to have the trade capital to get through the losses or you won’t be left standing to take the next trade which, at the very moment you throw in the towel, will inevitably begin the next 10 trade winning streak. Murphy’s Law, right?

BUT, there is a solution. You can successfully prosper from the nice price action in the silver market by using silver ETFs. AND, you can get good leverage by trading options in those markets. That’s what I’ve been doing lately and I’m loving the results. But instead of daytrading, I’m using a 195 minute chart to put on short term swing trades.  Below are a few screen shots of three different ways to trade silver.

The first screenshot is a recap of today’s 233 tick chart. It was very profitable as it usually is BUT, each trade required a considerable amount of risk, at $50 per 1 cent move in the contract. To trade this strategy safely and with responsible risk allotment, you probably need a $50,000 account. Otherwise, you’ll find yourself trading with scared money when you get a few losses and scared money is DEAD money. Lost money!

The 2nd chart, SLV (iShares Silver Trust), is a trade that I am currently in. It is a swing trade strategy that I like to trade with 4 positions. But rather than trade the shares outright, I am trading options with the nearest ‘in the money’ option to the entry price of the trade, as it is shown on the SLV 195 minute chart. I have already exited two positions and am letting the remaining positions play out until the trade ends. This strategy has won over 72% of its trades over the past two years. And, with options, you have great control over your risk and position size.

The 3rd chart is another Silver ETF, AGQ (ProShares Ultra Silver). This one also has won a very handsome 72.6% over the same two year period. Makes sense, right? This one trades at a completely different cadence however. I wanted to show this chart because there is a new trade that has set up and may trigger in soon. I would make a small adjustment to get above the swing level however. This one is a much higher stock price but with options, using the same strategy as I’m using with SLV, this is a very profitable strategy. Because there is so much time left with March options, the percentage returns are not as great as they would be later in the month. You could get better returns with Feb options but you might have to roll them over to March if the trade doesn’t conclude in time. This setup could cancel but for now, the setup is valid and will be confirmed if the trade triggers in prior to cancelling. We’ll see.

Regardless, silver is a market worth trading. It is steady and profitable.  The SST puts us on the winning track with tight and concise tradeplans that keep dropping silver into our piggy banks.

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