Yesterday evening I was looking at the Silver chart and I found an opportunity to long the metal. I am not expecting significant profits out of this trade as this one is a day trade and I am not looking to keep the position open for more than 2 days.
The red line is representing a 1 year resistance that was tested by a green candle shadow then price started to bearish. A trend line on the daily chart is being formed and I am expecting the metal price to go up again to test the yearly resistance one more time.
I entered the market with a very conservative leverage as I fear the bounce against me near the yearly resistance.
Trade details (Long)
Stop loss: 18.331
Lot size: 250
Used margin: 52.5 USD
Net risk: 178.50 USD
Net reward: 424.50 USD
As I mentioned, I will try to exit as fast as possible so I will close half of the position at the first Fibonacci level.and will probably close the other half at the second Fibonacci if it reaches there. My stop loss will be moved at the break even point after the price reaches the first Fibonacci level.
My previous hunches were correct but it was too late to enter the market. The NZD/CAD made a thick bearish candle yesterday and same applies to USD/CAD.
Even though I didn’t enter the market for two good trades that moved towards my analysis, I am still watching the market and looking for different opportunities.
I’m thinking of studying Silver intensively as the used margin for the trades can be small and the rewards are relatively big when it comes to the used margin.
I don’t trade Swiss Francs because the used margin is huge compared to the reward per pip. I find Silver is the exact opposite. Reward per pip is relatively high and the used margin for the trades is affordable if leverage is considered.
Of course, this makes it more risky and volatile, but I think this is what suits my character and I can make some cash if I really understand how the Silver behaves.