You may be already very familiar with products made of silver – from silverware to silver medals to coins.
You may also have heard of the mineral that those products are made of.
And, you may already know that there are those who mine silver and those who make and sell the products – and they make money. Yes, they do.
But do you also know?
That you could also have the opportunity to profit from silver even though you’re neither a miner nor one who makes silverware?
Interested? Let’s go and start your journey on trading silver on the global markets!
Commodities are raw materials that are being bought and sold in commodity exchanges located in various parts of the world.
These are then refined to create more products, which are then distributed to and bought by consumers – just as the silverware, electronics, jewelry, and medals that we’ve mentioned earlier.
Because of the fact that the participation in the silver market has a global reach, this creates continuity in the demand and supply dynamics, thus creating constant price fluctuations.
Think we’re exaggerating? Here’s an updated graph that gives you a quick preview on the market performance of silver:
These fluctuations then are the pockets of profit opportunity that silver traders are on the lookout for.
And here’s the deal:
Silver traders could participate in the market by buying and selling either spot contracts or futures contracts.
What are they, you may ask?
Spot contracts are those contracts whose prices follow that of the current market price of silver while futures contracts are those contracts whose prices are determined by how much buyers are willing to pay for with delivery dates that are set at a later date.
To make things clear, however:
This does not mean that upon that agreed-upon delivery date will the market price of silver will match that of the price of that aforementioned contract.
Futures contracts are either used to hedge (or to manage risk) a trader’s position or as a means for price speculation (to bet on what will be the likely future price of silver).
Contracts for differences, or better known as CFDs, are types of derivatives.
These are also financial instruments but whose prices are dependent on the prices of their underlying assets (in this case, silver).
A CFD contract involves a cash settlement of the difference between the opening price and the closing price of the said contract.
It is an understanding that an exchange will occur involving the difference between the contract’s price once it was opened and its price once it was eventually closed.
CFD traders also find that this particular financial instrument has another distinct advantage over other financial instruments like stocks or other commodities.
And that advantage is: CFD transactions are more efficient in terms of time and cost.
The reason is that:
Aside from cash, there are no further entities that are involved during the exchange – unlike in stocks wherein shares are being transferred; or in the case of some commodities where the actual physical goods are included in the exchange.
Also, another aspect where CFD traders find to be advantageous is that trading this particular financial instrument provides profit opportunities REGARDLESS of what might be the general trend of the market.
CFD traders could go long (buy at lower prices so that they may be able to sell at higher prices for a profit) or go short (sell at higher prices so that they may be able to buy back what they sold at lower prices for a profit).
Trading CFDs also provides them a hedge or a means of diversification to manage the over-all risk to their portfolio.
Here’s the deal:
You can’t help but be interested, right?
Are you ready to explore the world of silver CFD trading after reading that introduction?
Then let’s go!
You may go ahead and read our updated review here or create an account right this instant so that your journey can already begin by clicking on the logo or button below.
What is AvaTrade?
AvaTrade is one of the most recognizable brokers in the industry – a leader.
That reputation and recognition of excellence and innovation are at the forefront when it was made as one of the partners of the Manchester City Football Club.
AvaTrade was first established back in 2006, and eventually grew its customer base through the consistent service that it has been providing.
It has now more than 200,000 registered users – and counting especially once you’ve already registered – making more than two million trades per month.
What makes these facts important?
This is a testament to it being able to handle such volume and activity.
The company is being regulated by different regulatory bodies, primarily depending on which area in the world AvaTrade’s clients are located.
It is licensed in various countries such as Australia, Japan, EU, British Virgin Islands and South Africa.
You also do not have anything to worry about when it comes to the security of your data and money.
As AvaTrade has data encryption, also has an embedded True-Site identity assurance seal and it is WebTrust compliant. It also has implemented a system to prevent identity theft and credit card fraud.
And as for your funds, they have segregated your (and its other clients’) money from the company’s funds.
They are continuously innovating as shown by the fact that they were one of the first forex brokers to offer CFD trading (indices, commodities, stocks, etc.).
They also have a dedicated account manager to serve you and to provide you assistance once you already have your account set-up and funded.
And in relation to that, they have a customer service team that you could contact through various channels (chat, phone, email, and social media accounts).
AvaTrade offers a few choices on which platform you prefer to use, unlike other brokers which only offer one type of platform (usually WebTrader).
These choices are being offered for your perusal:
- MetaTrader4/MetaTrader5 application
- AvaTradeGo (their mobile application)
Although their web-based platform may not be as direct and easy to navigate around (unlike other brokers’ platforms), because you either need to download and install the MetaTrader application or log-in to their web application using another set of credentials, it does offer more data and more detailed price charts – that you could use for your analysis and execution.
Another advantage that the MetaTrader application provides (because of the platform’s interface with it), is that you could eventually have the option to use ExpertAdvisor trading bots to streamline/automate your trades.
Keep in mind:
Of course, you need to have a good understanding of trading concepts first before you should try that.
The whole process of registering for your AvaTrade account, depositing funds, executing your trades, and eventually withdrawing your funds is pretty straightforward.
Once you’d register for an account, you’d find that you are given choices to either register with your email, or use your existing Facebook or Google account credentials.
The latter option is a convenient option for you to be able to consolidate your log-in credentials.
You could also sign-up for a demo account first, in order for you to be able to practice doing your analysis and trades before risking your hard-earned money in the silver CFD market.
Once you’re logged in, you will see that the default page is the MyAccount page. The details that are provided in that page are your demo and live/real accounts that you’ve created.
You then will select which account you’d like to log in (again with another set of credentials).
In this portion, we shall be discussing the web trading platform (MetaTrader interface) only and not the one wherein you have to download and install the stand-alone MetaTrader application.
You then will be logged into the MetaTrader web interface; the price chart will be on the main pane situated on the center of the screen, while the list of the different financial instruments is located on the left pane.
Please be reminded:
Forex pairs are the default instruments that would show up; for the silver CFD option to show up, you need to right click on that pane; then select Symbols, and then look for CFD-Metals, then select Silver. After it has been added, you may now place an order.
To place that order, you may double-click Silver and you will see that the order pop-up window will show up.
We shall now delve further into the platform details (pros and cons).
Pros and Cons
- Selection of useful tools for trading silver
- Automated trading bots like ExpertAdvisor allowed
- Register via Facebook or Google accounts
- Free demo account to practice trading silver
- Takes a few sessions before you can get used to the platform
- No price alerts
Let’s first talk about the pros:
The interface with the MetaTrader application is advantageous to the AvaTrade platform as it provides lots of trading tools that may assist you in your analysis and trading execution.
You will also be given the option of using ExpertAdvisor (trading bots) to help you automate your trading executions.
Please keep in mind:
Only do the automation after you’re already well-versed with your trading process.
Now let’s talk about the cons:
The platform may not be as direct and easy to use when compared to the platforms of other brokers; as it may be designed for traders who are heavy users of price charts and technical analysis.
But fear not.
After a couple of sessions, you may quickly familiarize yourself with the whole interface and take advantage of the advanced MetaTrader features.
Also, the platform does not offer any price alerts – unfortunately.
The company has an emphasis on education.
And that is shown by the variety of training materials that have been prepared to teach you how to make informed trading decisions.
- Trading for Beginners
- Economic Indicators
- Trading Tutorials Videos
- Forex eBook
The training materials could be accessed via this link: www.avatrade.com/education
How to trade silver CFDs using AvaTrade
After a couple of sessions, you will be able to familiarize yourself with the MetaTrader features which emphasize price analysis and execution.
Please do note:
Perform the necessary analysis before executing your trades.
You may now double-click on Silver from the list of names on the left pane (as we’ve added the Silver CFD instrument earlier).
The trading window will then pop up, and you may go ahead and enter the following data:
- Volume of your order.
- Should you opt for a market order: Select Type: Market Execution. Click Buy or Sell.
- Should you opt for a limit order: Select Type: Pending Order. Put in the value that you would want for your trade to be triggered (either buy limit, sell limit, etc.). Click Place.
- Set a stop loss order.
- Set a take profit order.
Interested to Trade Silver?
We can’t emphasize enough:
Trading the CFD market could be seen as a tough and zero-sum game, but it can definitely be rewarding.
You need the competitive advantage that you could get over fellow market participants. And that advantage is what AvaTrade offers you!
Create an account with them now so that you will be able to participate in the silver CFD market. The sooner you do that, the better prepared you will be.
Please do keep in mind that it is very important to manage your risk at all times.