A short-term trade in Silver using Elliott Waves

The following are some snippets of a trade idea in Silver  that was shared with my Exclusive Club members where I used Elliott Wave Analysis to identify a low-risk trade in the short term.  I thought that you could benefit by seeing a good Elliott wave approach to trade in Silver in the short term. This is also included in my online Elliott Wave program as the latest case study.

First Steps to trade in Silver using Elliott Waves

When I looked at the intraday charts of Silver ( XAG/USD ), I found a consolidation that looked like a wave 4. So I went to a recent significant low and started counting as shown below. You will remember from my Elliott Wave book “Five Waves to Financial Freedom: Learn Elliott Wave Analysis” that a significant low depends on your trading time frame. If you are a medium-term investor in Silver, the significant low will be different because you will be trading a different degree. In the present case, we are looking at a short-term trade and hence the hourly charts will suffice.

Our Elliott Wave count starts from a significant low
Our Elliott Wave count starts from a significant low of Silver

Use Fibonacci Ratio Analysis to add  to your confidence

Having done a preliminary wave count, I use Fibonacci ratio analysis to become comfortable with that count. You will see that wave 3 has been completed at the top and there are five sub waves inside it. A careful observer will also see there are 5 sub waves inside wave 1.

Wave 3 has been completed.
Wave 3 in Silver has been completed.

Look for Elliott Wave clues

Elliott Wave analysis is best done by paying attention to many clues that come along the way. The personality of the wave, the distance it travels, and volume etc are all important. These cannot be left to a computer to judge. We need to see the combinations ourselves. Needless to say, our Elliott wave analysis of Silver needs to follow all the rules and guidelines.

Having decided that wave 3 is finished, my next goal is to decide where wave 4 will likely end so that I can position myself for wave 5. Remember, my goal is to use the Elliott wave approach to trade in Silver in the short term after wave 4. Having experienced many such situations in my career, I am always aware that what looks like a wave 3 could end up as the end of a 3-wave correction! And instead of getting a wave 5, we might merely see a ‘B’ wave kind of a recovery before one more sell off.

So, while I am currently looking to trade wave 5, I also know that there is a need to be alert for any news that could change the picture, and hence be ready to run for cover. All the same, a low-risk trading opportunity is presenting itself, which we should take.

Deciding where to enter the Silver trade

Wave 4 will be in 3 steps, and if it is going to be a simple correction, we are already in wave c. The next step is to decide the target for wave c. The next chart shows that if we approach $16.82, that will be an extended wave 5 inside wave c. As you know from the Elliott Wave book , FWTFF, extended fifth waves could make you rich!

Looks like wave 5 inside wave c is extending
In this chart of Silver, it looks like wave 5 inside wave c is extending

I took the trouble of looking at the minor wave v inside wave 5 and found that the target for that minor wave also came in close to $16.85 as shown in the Elliott Wave chart of Silver below.

An eye for detail will help
An eye for detail will help

Needless to say, the bottom came in at $16.93 and we promptly recovered to $17.55 by 3 pm on 16 June 2020.  So we managed to use the Elliott Wave approach to trade Silver in the short term, after wave 4, and was it profitable! That is the power of Elliott Waves. As disclosed, these are only part of the analysis shared to help you gain some more knowledge. The online Elliott Wave educational program discussed the nuances, and the actual analysis was sent to members before it cane below $17. This free blog exists as a living book, an extension of Five Waves to Financial Freedom.

Here is an additional link for your reference, and you will see how extended fifth waves can make you rich! https://wavetimes.com/fifth-wave-extensions-can-make-you-rich/

You may also like this post on Copper

Another post is on BHP 



4 Comments

  • Khalid

    Hi Mr. Ramki

    Wanted to ask : Does US government QE impact the Elliott wave counts for US indexes.
    Thanks

    • Ramki Ramakrishnan

      Khalid, Good question. We need to remember that everything is cyclical. Within a cycle, we may see extremes, driven by factors including natural calamities, government action, wars, pandemic etc. But eventually, the forces of the cycle will bring back the underlying rhythm. The market reacts to various developments, and the crowd behavior is codified by Elliott Waves. It is our goal to understand where we are in the cycle, and what the next move will be, both for direction and degree of move. We pick our trades carefully and at low-risk points, where the rewards far outweigh our risk. Remember, risk is always present. How we manage it is where your understanding and USE of Elliott Waves comes in. My online course should help you in that direction.

  • G kumar

    What about gold. It touch 2000 today

    • Ramki Ramakrishnan

      Hi Kumar, In my program, I will eventually post about Gold as well! Just yesterday I have done some consulting work for a few clients on both MCX Gold and Comex Gold. Would need to let some time elapse before I give it away online, which you will agree is only fair. Thanks for writing

Leave a Reply