79% of retail accounts lose money when trading CFDs with this provider. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Regulator asic CySEC fca

Trading the February seasonal pattern in silver

February 05, 2020 12:15
  • silver-bulls Today, we want to focus on a bullish seasonal pattern in Silver. Fundamentally, as market participants expect the Fed to keep on flooding markets with liquidity in order to avoid a funding crisis (particularly in the repo market), the general outlook for Silver stays positive. The Fed Watch Tool now also indicates expectations that of rate cuts by 50 basis points by December 2020 with a likelihood of nearly 50%, despite the latest Fed dot plot showing no interest-rate changes for 2020. With that in mind, the seasonal bullish window in Silver comes on February 5 and runs through February 21, and has developed over the last 16 years. It puts the advantage in the precious metal on the long side, and delivers a potential trading setup.

    Seasonal Pattern in Silver

    The key parameter of this seasonal bullish pattern is as follows: between February 5 - 21, Silver saw an average gain of 1.17 USD for 12 of the past 16 years. In the remaining four years, it dropped on average only 0.53 USD, while the maximum loss and the maximum drawdown were 0.96 USD.

    Trade the Seasonal Pattern: Silver

    And now the key question: how could we trade this? Here's the plan:
    1. After identifying the profitable seasonal window, we buy Silver on the closing price of the starting date on February 05 (22:59 CET).
    2. We identify the maximum loss within the seasonal period. Then, have a look at the daily chart and the ATR(14) indicator.
      • If the maximum loss is above the ATR(14) reading, round it up to the next round number and use it as worst-case-stop.
      • If the maximum loss is below the ATR(14) reading, use the ATR(14) as your stop-width (rounded up to the next round number).

    3. We Look at the average gain of the seasonal pattern, and place the take profit at this distance from your entry point.

    4. If the trade is not stopped out or it does not reach its take profit within the seasonal period, end the trade market on the closing price on February 21.

      Looking at current market data, since the ATR(14) in Silver on a daily time frame is currently trading around 0.31 USD, while the maximum loss of the window was 0.96 USD, our worst-case stop will be placed based on a maximum loss 0.90 USD away from our entry price.

      Meanwhile, the average gain of the seasonal pattern is 1.16 USD within this period. So, after entering the trade on the closing price of February 5, we would add 1.20 USD to get our take profit level.
    silver-cfd-chart Source: Admiral Markets MT5 with MT5-SE Add-on Silver Daily chart (between October 26, 2018, to January 31, 2020). Accessed: January 31, 2020, at 12:00 GMT - Please note: Past performance is not a reliable indicator of future results, or future performance. In 2015, the value of Silver fell by 12.8%, in 2016, it increased by 13.0%, in 2017, it increased by 6.4%, in 2018, it fell by 10.0%, in 2019 it increased by 12.6%, meaning that after five years, it was up by 4.9%. Check out Admiral Markets' most competitive conditions on SIlver and start trading from as low as 0 pips. To test Admiral Markets AUDJPY offering in combination with the described strategy above register for a free demo account today and experience the live market risk free!

    Discover the world's #1 multi-asset platform

    Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition! Trade With MetaTrader 5 Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
    1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
    2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
    3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
    4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
    5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
    6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
    7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
    8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
    9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

  • Admiral Markets Group consists of the following firms:
    Admiral Markets Pty Ltd
    Regulated by the Australian Securities and Investments Commission (ASIC)
    CONTINUE
    Admiral Markets Cyprus Ltd
    Regulated by the Cyprus Securities and Exchange Commission (CySEC)
    CONTINUE
    Admiral Markets UK Ltd
    Regulated by the Financial Conduct Authority (FCA)
    CONTINUE
    Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.
    Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.