Trading Silver with Elliott Wave
Most professional trend traders consider Elliott wave as the most important tools for trading. Professional traders use the Elliott wave theory to find the next possible move of the price Novice day traders should look to trade in the direction of the prevailing trend while trading the silver with this strategy.
However, with some proper practice and patience, it’s possible to master the Elliott wave skills perfectly to trade the silver like pros. Let us see an example of silver trading using Elliott Wave theory:
Figure: Trading the silver with Elliott Wave
The wave which moves in the direction of the trend is known as an impulsive wave in Elliott Wave trading. Trending market always moves in the direction of the trend with minor and major retracement. This minor and the major retracement are known as corrective in Elliott Wave trading.
Both the corrective wave and impulsive is extremely useful for trend traders. After the market completes the 5 the impulsive wave in silver, day trader looks for the price action confirmation signal. Generally, the market completes its fifth wave near a key resistance zone in the uptrend and for downtrend, it ends near a key support.
Professional day traders enter short in silver with the bearish engulfing candlestick pattern. This trading strategy is bit complex since it requires changing of the stop loss and setting the new stop loss to breakeven. Professional traders consider a deep price correction after 5 impulsive waves.
So they book half of their profit in the major support level and set their stop loss to breakeven. Once the market breaks the significant support zone traders ride the trade along with the trend. In the eyes of untrained professional trading, the silver with Elliot wave can be extremely difficult. It’s highly recommended that new day trader should practice this strategy in the demo account until they are 100 percent confident with this trading strategy.