Pitfalls of Silver Price Technical Analysis

Technical analysis of the financial and commodity markets has been used effectively by traders to analyze price movements of commodities and stocks for hundreds of years. Despite being one of the most effective methods for forecasting future price movements, technical analysis can break down and give conflicting signals when certain events occur.

This seems especially true in the silver market, where a number of factors have changed that precious metal's trading dynamic. Reading silver's future can be more accurately done by interpreting a combination of factors, which include price action and participant positioning.

Latest Trends in the Silver Market

As previously mentioned, a number of different factors are contributing to price movements in the silver market. To a person unfamiliar with recent developments, these factors might make market moves appear counter intuitive.

For example, large commercial traders are currently positioned for higher prices, while recent downward price momentum has hedge funds and speculators adding to the downside price pressure.

Furthermore, the ongoing investigations by the CFTC into the manipulation of the silver market have remained inconclusive in terms of identifying any wrongdoing. This is despite the fact that a number of incidences of large "not for profit" orders have moved the silver market substantially since the CFTC's investigations were initiated.

The CFTC has also stalled on setting position limits for silver with a legal challenge, which may affect the tentative limits on positions in 60 days. With each passing day, as more financial institutions get caught in dubious acts affecting the market- such as the LIBOR scandal, MF Global, and now Peregrine Financial Group - manipulation of the precious metals and other markets is becoming harder to perpetuate.

Other Factors

In addition to the above, no results have been achieved in the class action lawsuits against JP Morgan Chase and HSBC, with the lawsuits largely being ignored by the courts. With JP Morgan set to announce a 5 billion trading loss, and a new financial scandal appearing almost on a weekly basis, precious metals prices seem primed for a rally.

Furthermore, as Spain raises its VAT tax from 18% to 21% and riots are fomenting in the streets of Madrid, the Eurozone's ongoing sovereign debt crisis and the reduction of open interest in both gold and silver futures contracts indicate an imminent rise in precious metals prices is now likely.

Conclusions

Given the aforementioned situation, the following conclusions seem reasonable:

• A strategy of continuing the accumulation of silver with dollar cost averaging would probably be best considering current market and geopolitical conditions.

• The structure of the Commitment of Traders report does not give indications of future prices for precious metals, but it can give indications.

• Because traders generally watch the same technical data, technical analysis is a tool that can drive speculators to enter or exit the market.

• It seems only a matter of time before the realities of true supply and demand will eventually move precious metals futures prices to the prevailing street or retail level for the physical metal.

Overall, the case remains strong for holding and accumulating precious metals like silver while prices remain artificially depressed due to market manipulation.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   

Commodity Code Reviews - Does The Commodity Code Really Work?

While it may not be entirely apparent in our everyday lives, the fact of the matter remains that the world as we know it today is in a giant crisis, which is mostly of an economic nature. Some of the world's most powerful countries have accumulated a massive deficit and are now struggling to keep things under control. If you don't believe this, simply take a look at how deep in debt the United States of America government is, how they are trying to tame Forex, how the real estate sector is getting progressively worse, or even how the Euro has caused entire nations to enter an economic meltdown.

While some people are still trying to make things work, it is apparent that the current situation is deteriorating... there are however people who are still unaffected by this and simply go on about their business. The fact of the matter is that in times such as these, it is important to look at what has always worked for us in the past, and in this case we are talking about gold, silver and oil. These highly-coveted commodities will always find a buyer, especially seeing as how they are quite limited on Earth.

The mistake many people make when dealing with these commodities is simply waiting for the prices on them to go up. If humans were capable of living hundreds upon hundreds of years, then perhaps this strategy makes sense. But the fact of the matter remains that the best of us only have a few decades to truly enjoy the pleasures of life, and waiting dozens of years for the prices to become better is simply not something you want to base your life on. The good news is that there is another, interesting way to go about it: The Commodity Code.

The Commodity Code Review - A Look at What it Does

As you can probably imagine, The Commodity Code is based on what is written above: silver, gold and oil. The system behind it is quite simple and can be divided into three main stages.

The first one consists of simply looking at the quotes the banks have on gold, silver and oil. When the banks start to move money around, a certain piece of software referred to as A.M.B.E.R. takes note of it, noting patterns in how it moves.

The second step is where master traders intervene and analyze the information which the program has gathered for them. They use their knowledge and experience in order to determine if a certain trade is going to be beneficial for you.

Finally, the third step happens when these experts have found a profitable deal, upon which they send an approved signal to your MT4 terminal, bringing up the trades window on autopilot.

As you can see from this Commodity Code review, this is basically something which has the potential of making some interesting earnings without too much effort. However, because the program is automatic, it is highly recommended that you not only look into what other people are experiencing with it, but also start off slowly with very small investments. However, because real experts and humans are involved in the second stage there really shouldn't be any problems to worry about.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Reasons Why China Wants Its Citizens to Own Precious Metal   

The Precious Metal Achilles Heel

In the grand scheme of things, people have traditionally had more faith in silver as a currency than in paper fiat currencies.

Furthermore, since modern paper currencies are only backed by the creditworthiness of the authority issuing them, if that authority goes into default on its debt, the currency it issued could become virtually worthless.

Basically, in order for the fiat money system to keep going, more paper currency must be printed. Also, 'old money' like silver and gold must be kept at arm's length, both literally and figuratively, by the use of propaganda.

Ultimately, a lack of confidence will force this grand paper experiment into default as the essentially flimsy physical reality underlying fiat currencies is gradually exposed to the public currently being duped by it.

Silver Shines When Defaults Seem More Likely

A major series of defaults seems increasingly likely, especially given the LIE-bor gate scandal and the sovereign debt crisis in Europe. Countries around the world are having their debt ratings downgraded as government spending remains unrestrained by fiscal responsibility.

Another factor is the increasingly public exposure of the silver market's manipulation over the last few years. The price of silver has been kept artificially low by futures exchanges allowing short sellers to control whether or not physical delivery into a futures contract actually occurs.

Rather than actually having to deliver silver into a short futures contract, a government can simply print more money to pay for its losses should the price of silver futures rise.

Possible Default Scenarios

In the event of a substantial COMEX default, silver's price would soar mostly because of the scarcity of the metal relative to the underlying demand for it and the greater confidence that investors have in it relative to paper assets.

Furthermore, the exchange would probably set limits on position sizes and price fluctuations. Trading might also be halted or a sellers-only market established.

This sort of default scenario would seriously erode confidence in such one-sided paper futures markets as a way of setting prices for intrinsically valuable physical commodities like silver.

Price discovery for precious metals might gradually move to a more physical-based valuation system. Nevertheless, the retail sector would surge, and the demand for physical silver would likely determine its market value, at least for a while.

One could expect to see long lines with people buying and selling silver at the retail level. Governments might also place restrictions on precious metal holdings to avoid seeing their paper currencies devalue as a loss of confidence in paper assets grows.

Even if a metals futures exchange default is not the event that triggers the final stages of a loss of confidence in fiat money, the reactionary blow off as metal prices are allowed to move closer to a fair value equilibrium price will unmask the great fragility that has lurked beneath the surface of the manipulated paper silver market all these years.

Silver Will Remain a Store of Value

Insufficient supplies of physical silver could mean that the metal may not "flow" enough to become a de-facto currency in a default scenario.

Basically, using physical silver as a currency has some drawbacks, which include:

• An insufficient supply of above ground physical metal to cover massive currency circulation requirements • As demand grows, the price of silver as a commodity goes higher • It is consumed as an industrial and jewelers' metal • Its market suffers from a lack of physical sellers • Low mobility relative to paper and electronic currency • Safe storage challenges

Nevertheless, silver does not need to circulate as currency within a country to be considered a form of money or to act as a store of value.

The fact remains that silver will continue to be a valuable, mobile, liquid, tradable and recognizable asset that is in short supply relative to its true underlying demand.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   

How to Trade Commodities

Trading all over the world is generally based on various types of commodities. However, the trading today includes new commodities because of the advancement in technology. With technological innovations comes online commodity trading which give opportunities for people from anywhere to participate in the trading activities.

Commodities that can be traded are raw materials that come in specific volume or quantity. These products also have to meet certain quality standards to qualify as commodities that can be traded in any of the authorized exchanges. The standards that have been set should be met in order for the raw materials to be considered in international commodity exchanges. There are several types of commodities that traders can choose from. They can trade agricultural commodities such as coffee, cocoa, corn, rice, pork bellies and a lot more farm products that people need. Other traders may opt to deal with energy commodities like gas and oil or they may also choose metal commodities that include gold, silver, copper and other precious metals.

Traders today also have the option to trade new commodities that are brought about by technology like silicon chips and nano-materials or products. The usual way of commodity trading is done by floor traders in commodity exchanges. People may also participate in trading through commodity brokers. The brokers may provide important information to their traders especially those who are still new and who are trying to find their way around. However, these traditional ways of trading commodities is very costly and only a few traders can really participate.

Over the years, discount commodity brokers were created in order to lessen the costs of engaging in the trading business. Today, online commodity trading offers more trading flexibility and opportunities to private investors. New traders who would like to start trading do not have to put a very big capital to be able to participate unlike in the traditional trading platforms. There are various online trading brokers that offer other services to their clients aside from providing the necessary information that they need in order to gain from their trading business.

New traders though have to still learn the basics of the trading business before they actually make their investments. They may be able to make good profit if they know the essential elements that comprises their trading transactions whatever platform they would be using. Online commodity trading may provide them with the most convenient way of participating in this type of market especially if they have limited funds to start trading.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Reasons Why China Wants Its Citizens to Own Precious Metal   Various Orders in Futures Trading   

Momentum and Pairs Trading Spread Betting Strategies

Two (2) of the most common financial spread betting strategies are the momentum trading and pairs trading. It is in this light that traders need to be aware of these strategies so that they will be able to decide which one is appropriate to use. Of course, there is no "once size fits all" strategy that can be applicable to all instances and events of the market. In other words, there is an even when it is advantageous to employ while there is also an event that it is inappropriate.

It is in this regard that this article will explain both of these strategies briefly in the sections below.

Momentum Trading

On the one hand, momentum trading is a strategy in financial spread betting that involves monitoring the direction of all the traders in the market. The key here is to bet on how those traders will pull their prices. For instances, what this means is that when traders see the rest buying positions and trades in a certain stock, riding that momentum is the right thing to do. In other words, what this requires from a trader is to trade on a position until the momentum is noticeably slowing down. Hence, before the trade totally drops, a trader must get out to that position fast.

However, there is a catch to this. In order for a trader to do this properly, appropriate and reliable data should be available and present. The sets of the market and economic data that a trader needs to look into should be those for intermediate level. This is in order for the prediction and monitoring to be precise.

Pairs Trading

On the other hand, another strategy that is applicable in financial spread betting is the pairs trading. This is about trading in two (2) companies within the same market or sector at the same time. For traders to profit from this strategy, they must buy trades or positions to a company that is performing stronger while selling the one that is currently performing weaker than the other. However, the premise behind this is that it may only work effectively when the sector is getting stronger or performing positively. If the market is on the opposite, then what the trader needs to do is the reverse.

The idea of this strategy is quite straightforward. For instance, if a sector or a position is, in fact, worth more of a trader's attention, then it should receive more. In other words, this requires the trader to buy more on the company that is moving positively stronger rather than those that are weaker. Hence, this gives the traders to win and gain from both bets instead of profiting from just one.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Various Orders in Futures Trading   

Precious Metals Paper Sellers Conveniently Trapped

The large and mostly naked holders of short positions in precious metals are conveniently trapped, especially in the silver market. Covering in any meaningful way would blow the U.S. Dollar's cover.

The Dollar's increasingly serious valuation issues are also being ignored, but this may only last as long as the Euro continues to remain in the currency market's spotlight as a target for selling pressure as Europe's debt problems deepen.

Financial Repression

Financial repression was implemented after World War II to help melt away the war's oppressive debt burden. It consisted of maintaining the following conditions:

1. A moderate rate of inflation 2. Some amount of growth 3. A compelling situation for large banks to buy debt

Nevertheless, the extra, and unmentionable, fourth ingredient to the official policy of financial repression is modern day coin clipping. Since physical silver has long been absent from circulating currency, the next best thing is to bury its value in paper.

Basically, large banks have been allowed to enjoy commercial status in futures markets, which has allowed giant short positions to evolve. To be fair, this has occurred in all commodities, although the silver and gold futures markets typically see a far higher concentration of sellers.

This questionable access allowed obvious "not for profit" selling, as well as coordinated and manipulative selling, according to whistleblower Andrew Maguire. The result has helped keep precious metal prices low and sentiment poor to confuse the investing public for years.

Pretending That Regulators are on the Beat

In the meantime, not only have those big banks made easy profits, but they also enjoy the ability to buy, control and build long positions in the physical metals market without having any underlying commercial interest like miners and industrial users. They do this by inducing weak specs to sell on the downside momentum they induce.

The futures markets make this manipulation convenient by legitimizing the banks' participation, which typically characterize their market manipulation as hedging customer business or over the counter derivative products.

As a facilitator of this manipulative process, government regulators have turned a blind eye since the process keeps metals and other commodity prices low, thereby allowing some political leg-room for more printing of paper money.

The mainstream media would not dare mention market suppression, since the word conspiracy seems synonymous with lunacy or fringe theories at best. Also convenient is the fact that silver has become of substantial strategic importance in modern times as an industrial commodity.

Despite poor economic indicators overall, perhaps this manipulation serves to support a spurious "hope" campaign that a return to better economic times is likely. For those that remain skeptical, physical silver continues to offer a safer haven than paper currency.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   

Using Stop Orders in Share Dealing

Stop orders are among the most basic things that any trader needs to understand when entering the world of share dealing. This is because with the fluctuating nature of the shares or stocks markets, it would be very unpredictable for a trader. It is also the common tendency of many traders to overtrade because of their want to earn more profits. However, without due diligence and appropriate analysis of the trader, it may only result to a nightmare instead.

In order to protect the profits of a trader from fading as much as possible, one way that this can be done is by using the stop orders. This is actually a method in order to have a cap on the liability of the trader as far as possible. With this option, the trader will be able to have a maximum and full control over his or her trading account.

If you are quite new in this field, there are several things that you need to understand about these stop orders. Specifically, these are about the three (3) most important aspects, which include the general description of this kind of order as well as protecting the gains of the trade and, finally, limiting losses. These will be explained in the following sections hereunder.

On the one hand, a stop order in share dealing is a kind of instruction that directs to execute a sell-off at specific and predefined price point. For most traders, this is being ordered or executed in order to give them an extra hand in the trading session. The effect of this is to generally provide a broker a guide when to stop or exit a position. Hence, the primary trader no longer needs to monitor the market every single second in order to determine where the exit point is. With this kind of order, it would be automatic that when the market reaches the specific level that you have determined, then such order will be executed.

On the other hand, one of the major reasons why this is being ordered is in order to protect the gains or profits of a trader. For instance, when the position is in a situation wherein the value of the shares is already increasing resulting to a yield in profits or gains, then the normal thing that a trader would do is to want for more. However, doing such this would be too greedy. It may even result to more losses than gains. Hence, it is the best thing to know where to stop in order to protect what you have.

Moreover, stop orders are also being used in order to limit or isolate losses. This refers to the lowest level that a trader can take to lose his or her position. Hence, when that point has been reached, then that signals to exit the market.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Various Orders in Futures Trading   Reasons Why China Wants Its Citizens to Own Precious Metal   

KST Indicator

In the early 90s, Martin Pring, developed an indicator called the KST or 'know sure thing.' The KST is a technical analysis tool that is used to give the investors signals and to detect trends in the market and to remove the short term movements while detecting these trends.

There can be a lot of noise in the market, with price fluctuations and so on, and in the short term, that will cause a lot of buy/sell signals that are really not good signals to follow due to their rapid fluctuations. The KST removes these problematic short term signals and smoothes everything out for the investor to be able to better read the trends.

The KST indicator is made up of 4 periods that are all combined into one single oscillator. The KST indicator is read the same way other oscillators are and are most commonly used to identify bullish and bearish movements in the market and give the appropriate signals for each.

When using KST within a trading system, make sure to do the following:

• When KST is in a trend pattern and KST crosses above its signal line, traders can buy at the next day's opening price.

• When KST is trending and KST crosses below its signal line go short the next day at the opening price.

• When KST crosses below its signal line then Sell at the next day's opening price

• When KST crosses above its signal line, then cover at the next day's opening price

KST signals are not reliable when the indicator is flat or close to the zero line. When this is occurring, it means the market is ranging, and the trader shouldn't base their moves on the signals given. Wait until the market isn't ranging before giving the signals weight.

Set up for the KST is relatively easy and is done on 9, 12, 18, and 24 month ROC. The 9, 12, and 18 month ROC has been smoothed by a 6 month simple moving average. The 24 month ROC and the signal line both use a 9 month simple moving average.

The following is a standard formula for using the KST indicator.

• Start off by calculating the rate of change indicator for 9, 12, 18 and 24 months.

• Using a 6 month SMA (simple moving average) smooth the9, 12 and 18 month ROC.

• Next, using a 9 month SMA, smooth the 24 month ROC.

• Using their time period as a gauge, weight all 4 of the smoothed out ROCs. The way this is done is by taking the sum of all 4 of the periods, which is 63, and each period is multiplied by the correct value. For example, the 9 month ROC will be multiplied by 9/63 and the 12 month ROC will be multiplied by 12/63 and so on.

• To figure out the KST indicator, add the weighted values

• You can use the 9 month simple moving average of KST, you can figure the signal line

The KST indicator is not foolproof and it has its own problems in terms of whipsawing too much when the market is on an uptrend. The key to doing well with indicators is learning how they work and what information they give. Then learning how to read the information the indicators give you and applying them to your trading strategies. The more you study the indicators, the more experienced and comfortable you will become using them, however always be aware that there are no failsafe methods and if care is not taken when calculating the information gathered, traders can make costly missteps in their trades.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Various Orders in Futures Trading   Reasons Why China Wants Its Citizens to Own Precious Metal   

Futures Trading Success With This Simple Tactic

You may be surprised to hear that many profitable futures speculators have success rates between 30% - 50%. Futures traders are successful because their successful trades outweigh their unsuccessful trades, not because they are great predictors of the market. The one guarantee of trading is that you will lose money.

This makes psychology a huge part of trading. Futures market professionals achieve success in this environment by controlling risk with money management rules. Most futures traders want to be right, not control risk; because controlling risk goes against our nature as human beings. Many of my clients first come to me in search of the holy grail, they want the perfect entry and perfect indicator.

The reality is that it does not matter what market you are trading in, there is no perfect setup, or indicator, or system. As traders we can only control certain things, and we must focus on them. One of these is strong money management rules. With this you will be able to control the two rules of trading: let your profits run, and cut your losses short.

Many traders blow up their accounts, because they do not adhere to these two important rules. Strict money management will keep you from ending up in the poor house. Also, not having rules brings a lot of uncertainty into the equation. The brain does not like uncertainty and tends to get a bit erratic when faced with it.

A lot of new traders see books where people took two thousand dollars and built it into millions of dollars, and think it is easy. If they can do it why can't I. Well the real reason is that you have pie in the sky ideas, and they do not. I need to be frank, because a lot of new traders have this false reality.

A successful futures trader does not put all of their focus on a trading system or a trading method. A successful futures trader first focuses on themselves and money management or risk management, I look at these last two as basically the same. If you can manage money then you should be able to manage risk as well in my opinion.

Basically, a lot of people come into trading with baggage from other industries. Trading is not the same everyday, it is not learn a series of steps and repeat them until the bell rings. Trading is an intellectual game, and only the strong survive.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Reasons Why China Wants Its Citizens to Own Precious Metal   

Who Needs Vegas To Win Big, Trade Options Instead

Options are higher risk futures that you can buy and sell against stock you own or don't own. Investors have made and lost fortunes trading options. Jim Cramer made enough in one options trade to quit Goldman Sachs and start his own hedge fund. I only want to mention it briefly because it can be a powerful tool as a hedge or even to add gains on stocks you already have.

There are two types of options in stock markets which is what I'll be focusing on. They are calls and puts and you can either buy or sell them. There's an easy way to remember what they mean by associating common phrases to them. You buy a call when you think the price of something will go up. So just like you "call up" a friend, you buy a call when you think the price of a stock or ETF will go up. Selling a call gives you instant cash that you keep as long as the stock price stays the same or goes down (the opposite of buying a call). A put is the exact opposite. You buy a put when you think the price of something will go down. So just like you "put down" a friend, you buy a put when you think the price of a stock or ETF will go down. Selling a put gives you instant cash and you keep it as long as the stock stays the same or goes up (the opposite of buying a put). As if this isn't confusing enough, options come with expiration dates. You're free to buy and sell until the expiration date but on the expiration date, two thing can happen. One, your option can be exercised for stock shares with you making some profit and now owning shares of the stock. Regular stock trading strategies apply then. Two, your option expires worthless and you lose all your money!

This can be tricky to comprehend at first but you'll get used to it after some thought and additional study. Trading options on individual stocks is very time consuming. For average people, I recommend only trading options against ETF's or selling options on stocks or ETF's you already own. For example, if you think the economy will crash then you can buy some calls on an UltraShort or Bear fund. Not only does this strategy require less capital upfront but it doesn't require too much research. All you need is a feeling on the overall direction of the economy to profit. You can also sell calls on stock you already own and pocket money every month if you're right. This is a very complex subject and I will be going into more detail on how to make money in this area in my subscribers only area. I only want you to be aware of its existence. It's never a bad idea to invest a little play money in options but be advised that you can lose your whole investment very easily, so tread lightly. On the other hand, if you hit a home run, you'll be telling your friends about it for years. It's not uncommon to make 30-100% on your money trading options but the stress and heartache is sometimes unbearable.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   

Advantages of Online Commodities Trading

The advent of technology has also changed the way trading has been conducted. Aside from the traditional trading floor that that is used in authorized exchanges of goods or commodities, traders may also work through online commodities trading. Traders may think of the latter type of trading for various reasons and considerations.

Traders may find it more convenient to do their transactions online even while they sit at home. They may be guided by brokers who have some in depth knowledge and considerable experiences when it comes to trading through the internet. Traders may also experience ease in performing their trading activities because they can make use of software programs that provide the essential information that they need in analyzing the commodities market and in making trade decisions.

Online traders have access to their accounts and to important tools such as charts that they need, quotes that they can study as well as details and news about the commodities that they are trading. They also have the advantage of having more chances at gaining profit even with a limited capital to start with. Online commodities trading will be good for those who are new to the trading business. The commissions are lower and traders are able to execute their transactions very quickly. They are also able to get results in a very short time.

Online traders have the advantage of working independently. Although there are suggested strategies to use, they can modify or combine it with other techniques that will help them in predicting future trends in the commodities market. This type of one-stop shop trading business allows newcomers to learn the ropes without having to take too much risk in the process.

Online traders can also benefit from the various types of accounts that are available. They may choose accounts depending on their level. Beginners as well as expert traders may find the best types of accounts that they are mostly comfortable dealing with depending on the capital that they have put up to start their trading experiences. There are also brokers that allow newcomers to start with mini accounts in order for them to get a feel of the trading process or to familiarize them with the trading system that is being implemented.

Traders especially those who are new to commodities trading may do some research about the products that they would like to deal with as there are software programs that are designed for specific commodities in the market. For those who are new to the trading industry and those who would like to try their hands on it, they may opt for online commodities trading first.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Reasons Why China Wants Its Citizens to Own Precious Metal   Various Orders in Futures Trading   

Silver Prices and Priceless Rumors

Strange rumors have been cropping up in the silver market lately - all seemingly designed to quell relatively buoyant market sentiment.

One example was the recent CFTC story printed on the Financial Time's front page citing a source predicting that the silver market manipulation case will soon be dropped.

Another case was the recent trader revelation about the bullion banks being long physical precious metals and short futures contracts, although this has since been substantially debunked by none other than the well-known silver market manipulation whistle blower Andrew Maguire.

Basically, concentration is the issue, not hedging - as silver analyst Ted Butler has been pointing out since the 1990's. Essentially, it is the presence of just a few large players who make up the short holdings that are positioned against a much more diverse group of longs that is the primary issue.

This situation is acceptable in the same way that it was apparently acceptable for Ponzi schemer Bernie Madoff to show "everlasting" high returns, which eventually were exposed for the sham that they were.

Silver Market Manipulation is Fact, Not Theory

The point here is that the damage is done. For the investing public, the manipulation of the silver market is now well documented, transparent and quite obvious. No longer is an elaborate or paranoid conspiracy theory required.

Thanks to years of work by GATA and Ted Butler, who has paved the way for an army of blog writers and market analysts, the story has become easily accessible for the growing number of precious metals investors from all walks of life. These people are now increasingly coming to terms with precious metals market manipulation almost half a decade after the latest financial crisis.

Such investors have typically lost faith and confidence in the established financial and government institutions and are calmly looking for investment diversification and long term preservation of their capital.

Silver Hoarders - From the Hunts to the Modern Day Metals Investor

The Hunts were convenient scapegoats for the previous major silver price rally of the 1980's. At that time of high inflation, these notable hoarders seemed radically right of center and far outside the mainstream. They were wealthy Texas oil men, who could have been scripted right into a well-known television series.

Today's silver investor is part of a much more diversified group of physical longs. Armed with logic and reason - plus a working knowledge of the varied uses of silver in jewelry, medicine, cutlery,tableware, electronics, photography and elsewhere - they have many excellent reasons for hoarding silver to help protect their future financial security.

All of these represent valid reasons for holding physical silver that just serves to lend further support to the longstanding and almost forgotten monetary significance of this precious white metal, which will remain a valuable hard currency long after the un-backed paper Dollar is defunct and worthless in commerce.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   

No Bull in the Cattle Market

Cattle stocks and beef production in the U.S. have been declining since 2002 and beginning stocks have dropped more than 5% in the last five years. This summer's drought also led to massive slaughters as farmers couldn't efficiently feed the animals to hold them back for a later date. The declining cattle stocks across North America will take time to rebuild. Our thoughts have been placed on the buy side of the cattle market as it tightened up and we expected the cattle market to rally sharply in 2012. However, there have been major changes within the global cattle industry that may have signaled an end to our domination of the cattle global cattle market.

It's no secret that Australia, Brazil and Argentina have been building their cattle business over the last several years. Brazil is second in total production while Argentina and Australia lag behind Chinese and European Union production. Meanwhile, our own production has fallen behind China and places us fourth on the list. The kicker is the new number one on export list - India.

Indian beef production has soared and since very little of it consumed in India, their growth in the export market has been nothing short of astounding. India passed the United States in beef exports in 2011 and will pass Brazil and Argentina this year. India's 2012 record exports of 2.16 million tons will account for nearly a quarter of global trade. This boom has been fueled by cheaper exports to Asia, the Middle East and North Africa. India's quickly growing supply has picked up the global supply slack due to the North American drought of 2012. India's ascension to world leader in cattle exports should cause us to pause for thought.

First of all, every westerner's image of Indian cows relies on the cows' place as a religious symbol. Most Indian states have laws against slaughtering cattle. Therefore, the numbers that we're quoting are only from above the board, licensed processors. The underground meat trade is estimated to have shipped another 1.5 million cattle. This is an additional 4.5% increase on top of their 2012 record exports. If we include these numbers in their processed tonnage, their exports would surpass Brazil's record production of 2.19 million tons in 2007.

Secondly, the computation of beef production must be taken into account when viewing India's growth as a major exporter. The trick in the numbers is that water buffalo also count as beef production in all of the World Agriculture Board's global numbers and India has no laws against the slaughter of water buffalo. Water buffalo production here in the U.S. would be treated the same way. They both fall under the category of, "bovine meat," and they will combine to make India the top bovine meat exporter in the world in 2013.

Finally, we should all view the interaction between the Indian government, the economy, and the primary beliefs as a negotiation of economic compensation for the sacrifice of personal beliefs. India is a predominantly Hindu country. Hinduism teaches that the cow is a sacred gift that provides man with everything he needs. Milk, butter and other dairy products, of course, but also fertilizer and manure for fires. The cow recycles the earth and leaves it no worse than it found it. These are the principals that are up for sale. The story has been played out over and over in history throughout the world.

Trading the cattle market for the all time highs was the 2012 trade that never happened. Many are still looking for it based on the tight North American cattle supplies. Personally, I think greed will supplant morality and India's production will provide enough of a cushion to keep prices relatively, in check. I will still look for cattle to trade past the 2012 highs of $137 however; I don't believe we'll approach the all time highs of $167 from 2007.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Various Orders in Futures Trading   

The Power of the Powerless Supports a Raging Silver Bull

In essence, taking possession of artificially cheap silver is not only akin to an act of wealth conservation, it is also a quiet form of protest.

Protest against a failed currency structure imposed by a government up on its citizens that has given rise to the extreme complexity and overgrowth in the financial sector and which allows those closest to the free money a significant advantage over the populace.

The ownership of silver represents real savings or capital formation - two things that policy through action is against. Policymakers fear that if people are too concerned about the future, then they will not spend, which in turn reinforces the issue, especially in a consumer-driven economy.

Of course, this assumes that idea that people need to eat and burn fuel to survive, which is the most basic form of consumption.

A Relatively Quiet Silver Rally

Comments in the media have been largely absent from the latest rise in silver. This should not come as any surprise, since the media in all categories is misinformed or manipulated to say the least, and the financial media is no exception.

Mainstream media has either missed or kept quiet about the real reason for the rise in silver, as well as the entire reversion back to the natural upward course that the price of silver has resumed.

Maybe when silver has moved up 30 percent from its present levels, the media will be forced to make notice of its rise. Perhaps only then will it comment to call a top in silver - yet again- in order to manipulate the price lower?

Furthermore, the fundamentals for silver have not changed. No new supply has come onto the market nor has a major form of consumption been identified. Nevertheless, the case for investment demand has become even stronger.

The silver market currently appears to be moving higher off of a very large base completed during a time of even more negative sentiment than what was observed after the 50% 'correction' seen in 2008.

The macro picture continues to be shaped by world war of currencies. Europe is a mess and the situation is much more serious than it would appear on the surface. The notable rise in youth unemployment in the United States and Europe (see chart below) since 2008 should say it all.

http://www.economist.com/blogs/dailychart/2011/07/youth-unemployment

Also, since when has the Middle East not been a tinder box? China continues to quietly gather wealth as it spends its remaining coupons and leaves the party to go home and deal with its own mess. Japan is creeping back into the news.

And for all the rhetoric, no one comes close to accepting the impossible math on the United States paying back its $16 Trillion national debt - or for that matter,the chances of it paying back the over $200 Trillion of unfunded future liabilities.

The Missing Media

Outside of the GOP's chatter about a new gold standard, the political media theater is in full swing intensity ahead of the upcoming national election. If anything, this provides a good cover for the rally in silver and gold.

Perhaps the relatively invisible silver rally might be preferred, rather than a noisy and costly spike upwards that could well be induced by panicked short-covering by the financial institution run by everyone's darling banker, Jamie Dimon.

In a tiny market such as silver, where a few big players typically dominate and manipulate global price discovery, being invisible may be the real and only power held by those who would one day choose to buy or continue to accumulate precious metals.

Basically, the media remaining quiet for a little while longer while silver prices adjust might serve to quell any policy or political backlash.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Various Orders in Futures Trading   Reasons Why China Wants Its Citizens to Own Precious Metal   

Trading Futures Options for Profit

Beginner traders who would like to try their luck as players in the various markets may try their hands on futures options first. They still need to invest some capital though not as much as when they directly deal with commodities or stocks by the volume. There are lots of traders who are only transacting in futures options only as they can gain a considerable amount in terms of profit from their limited investments.

Beginner traders have to understanding of the basics of this type of trading. An option gives them the right to buy of to sell a futures contract at a designated price in the future. However, they do not have the obligation to buy or to sell it. They have to know that though the capital that they have to put up at the start may be relatively low, there are underlying assets that are represented by only a fraction of its value. This is now called the futures options.

Traders may buy a call option if they think that the prices of the underlying assets would go up at before a certain date in the future. On the other hand, they may buy a put option if they feel otherwise. Whether beginner traders buy a call or a put option, they will have to pay for a corresponding price which is called the premium. They also have to consider the time element as options do expire at a certain point in time. Options are not meant to stay forever but the longer the time the traders have, the more expensive the option will be.

Beginner traders have to study the prices of the options that they are taking. The amount at which the futures options are based upon is called the strike price. They may close their option position before the expiration date and get their profits as well if the trend of the prices is in their favor. Though future options may seem somehow difficult and confusing especially to beginner traders, once they learn and get used to it, they may enjoy reaping their profits in the process.

People who would like to learn more about futures options before they begin trading may study by themselves or they may learn through some online tutorials especially from those who have been successful in trading futures options. They may also seek the advice of those who have stayed long enough in the trading business to be considered as experts in this type of market.

Silver Prices and the Risk of Speculator Double Jeopardy   Pent Up Silver Demand and The CFTC Linchpin   Pointers for Commodity Traders   The Gann Technical Analysis of Price Movements   Reasons Why China Wants Its Citizens to Own Precious Metal