To find the trend of silver one just has to look up.
When a trader goes to the silver charts to identify the present direction of the trend the direction should be obvious from first glance. Under heavy volatility, the commodity has reached a new all-time high at price of $29.34.
Looking at the daily chart, the current uptrend is identified by the rising trend line beginning at the end of August. The trend line rises with the price making 5 points of contact with the trend line. After each point of contact the price then bounced higher. Any trend line with more than 5 contact points is a significant trend line.
Many traders use the following strategy; when the price moves back towards a significant trend line a new position is initiated in line with the long term direction of the trend.
The trend line can also serve as a reference point to place a protective stop. A stop can be set underneath the trend line should the price breach below the trend line and reverse into a downtrend.
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Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
