It is likely that you’ve already encountered things or ornaments made of silver at one point or another.
Silverware and silver jewelries are being sold in various parts of the world.
You have seen that silver products could be sold by craftsmen and bought by the public, but what if you could not create silver products to sell?
This article could help you recognize that profit opportunities exist in the silver commodities market that YOU could take advantage of.
More often than not…
Commodities are just raw materials that are being traded in commodity markets in various locations in the world.
These raw materials are then usually processed and manufactured to create more end products that could be bought by consumers – examples of which are:
- Electronics components
- Medals, etc.
Since silver is a well-known and widely-used metal, the participation in the trading of this metal has a global reach.
Here’s a basic graph showing the changes in the value of silver over the past several years:
This then creates ample liquidity and volatility to present profit opportunities for traders.
Participants in the silver market could buy and sell either spot contracts or futures contracts.
So what’s the difference?
The difference between those two instruments is how the contracts are priced:
The price of a spot contract reflects that of the current price of silver in the market.
The futures contract’s price is that of the price that a buyer is willing to pay for that contract for a delivery date that has been set in the future.
This does not denote that the market price of silver will match that of the contract’s price once the agreed-upon date has come.
Futures contracts are used instead to hedge silver bets (a form of risk management tool) or to speculate the future direction of the price.
Contracts for differences, or more commonly known as CFDs, are tradable financial instruments as well.
These are kinds of derivatives.
So what are derivatives you may ask?
Derivatives get their prices derived from the prices of the underlying assets.
The execution of a CFD transaction entails a process wherein there’s a cash payment on the difference between the opening and closing prices of the contract.
It is basically an agreement to exchange the valuation difference between its opening price and its price once it was closed.
Better check out this video so you’ll better understand about CFDs. This clip takes just a few minutes to watch but once you’ve finished until the end, you’ll surely understand the basics.
Silver traders look to benefit from these CFD transactions because of different reasons.
First is that CFDs are more efficient in terms of time and cost.
How is that so?
Because aside from the cash exchange, there are no further entity that is involved in the exchange; unlike in stock trading wherein shares of the stock are included in the exchange or in the case of some commodities wherein the physical material is sometimes involved in the exchange.
A second advantage is that CFD transactions enable traders to find profit opportunities regardless of how the general market is faring, as they can be long (buy at lower prices and later sell at higher prices for a profit), or be short (sell at relatively higher prices and buy them back at lower prices for a profit).
CFDs allow silver traders to not only speculate on the direction of the price action, but it also provides them an avenue for diversification (to manage risk).
How can you actually use this?
After that introduction, we’re pretty sure you now are interested in learning the details on how you may be able to take part in the profit opportunities provided by the silver market.
If you’re tired of being a passive observer or consumer, then we strongly recommend that you explore XM which is one of the leading forex and CFD service providers today.
What is XM?
XM is an industry leader and has garnered recognition and awards from award-giving bodies and from its peers over the years.
This company, which was founded back in 2009, has now over 2.5 million clients situated in different parts of the world (plus you of course, once you’ve finished registering for an account).
And here’s the kicker:
Over 2.4 billion trades have been done on its platform without any incidents of requotes or rejected trades happening.
XM strives to follow its vision of ensuring fairness, dependability, and trustworthiness.
And another thing:
The virtues mentioned above are further strengthened by the fact that it is regulated by different organizations in specific locations (where their clients reside).
These regulatory bodies include but are not limited to:
- International Financial Services Commission (IFSC)
- Cyprus Securities and Exchange Commission (CySEC)
- Australian Securities and Investment Commission (ASIC)
It is assured that all of their clients are offered fair trading conditions REGARDLESS of the account type.
XM offers plenty of choices to cater to the different preferences of traders. These choices would of course also be available for you.
These choices range from the financial instruments that could be traded on their platform (be it forex, commodities, CFDs, stocks, indices, energies, and precious metals) to the platform which you prefer to use.
Some of the platform applications that they offer are the following:
MT4 for PC, MT4 Multiterminal, MT4 for WebTrader, MT4 for iPad, MT4 for Android, MT5 for PC, and MT5 for WebTrader.
They also cater to your inquiries, teach you the basics, and hear your feedback on what they offer. To do those and the like, they have set up a 24×5 customer service team which could be reached via live chat, email, or phone.
We now will check out the pros and cons of what this broker (and platform) has to offer.
As was mentioned above, XM offers you choices on what kind of platform you would like to use for your trading.
These platforms could be classified into two general types: downloadable MetaTrader software and XM’s webtrading interface (also powered by MetaTrader but there’s no need to access separate stand-alone software).
This sets them apart from other brokers who offer only one type, which is the webplatform.
Although, the MetaTrader layout may seem to be intimidating at first – as it definitely is not as simplistic and straightforward as other platforms have – it contains more in-depth price data that you could use for your technical analysis.
And chances are…
You’ll be able to familiarize yourself with the features once you’ve tried the platform a couple of times.
Another feature that might provide you a competitive advantage is that MetaTrader allows the use of trading bots (ExpertAdvisor bots).
How can you actually use this?
This will help you automate your trading process, once you already have your trading system and risk management process in place.
The end-to-end process of signing up for an account, depositing money in your account, executing your trade, and the subsequent withdrawal of your money is a pretty much direct one.
Unlike other brokers which provide you the option of signing up using your existing Google or Facebook account, that option is not available in XM’s platform. You could only sign up using your email account.
Even though it may not be that convenient, it has its advantages if you’d look at it from a security perspective.
Your trading account which contains your funds would only be accessed via your trading account credentials – and not some other log-in credentials that are shared with other applications.
XM also offers you the option to register for a demo account.
This is a good practice area for you to test your strategies and execution yet not risking any of your money.
Once you have registered, you will be provided an ID for you to use to log-in.
And by the way…
You’ll be setting up your own password. Upon logging in via these new credentials, you’ll be directed to the default page which contains your account details and links to the other sections of importance, such as: research, deposit, withdrawal, etc.
If you now would like to trade, please click on the Platforms link which is situated at the top of the menu.
Note: To simplify things for this article, we shall focus only on the web platform.
Please click MT5 WebTrader. Afterwards, the WebTrader 5 window would pop up.
When you’re in that particular screen, you will find that the main pane has the price chart. Then on the left pane is the list of the different tradable assets that could be traded on XM’s platform.
You might notice that the default list only contains forex pairs. To show the silver CFD instrument, you need to right-click the symbols list pane, then click Symbols.
Under CFDs, select Spot Metals, then select Silver.
And as you can see from the photo above, there are lots of asset classes to choose from, from forex pairs to CFD contracts on energies, commodities, metals, indices, etc.
Pros and Cons
- Variety of charting tools for silver trading
- ExpertAdvisor and other trading bots
- Proprietary strategies
- Competitive bid-ask spreads for silver and other commodities
- Stop loss and take profit orders
- Takes a while to get familiarized
- Not available in a few countries
Let’s first talk about the pros:
MetaTrader application being infused in the platform provides a benefit to the traders namely by providing plenty of price charting tools for analysis and execution purposes.
And in addition…
You could also make use of the ExpertAdvisor option once you have already created a system for your trading process.
In a few words:
ExpertAdvisor makes use of trading bots to automate your trading.
XM provides proprietary trading strategies and technical indicators to help you gain an advantage over fellow competitors in the market.
XM also has competitive bid-ask spreads so that you will not be significantly affected once the volatility spikes up and the liquidity dries up – which happens here and there.
XM also places an importance on risk management as it has stop loss and take profit orders to help you manage your trade once it has been opened.
Now let’s talk about the cons:
The layout is not that simple to use at first as it looks to be primarily designed for those who are using price action as an analysis tool.
But one thing’s for sure:
You will be able to familiarize yourself after probably a couple of sessions.
XM is not offering its brokerage services in the areas of USA, Canada and Israel.
XM has put an emphasis on education.
This is evident on the fact that they are offering you plenty of educational materials, live rooms and webinars to help you gain more knowledge in trading.
They have this Research section which contains:
- Tutorial videos
- Trade ideas
- Economic calendar
These resources provide you with essential information that you might use in executing your trades.
How to trade silver CFDs using XM
This platform has several tools that you will definitely find to be useful once you’ve gotten the hang of it.
And don’t forget:
Do the necessary analysis before executing any trade!
Once you’ve double-clicked Silver from the list on the left pane, you will notice that a new window will appear.
You need to fill up the following information:
- The volume of your order.
- If it is a market execution order type: Choose if you’ll buy (by market) or sell (by market).
- If it is a pending order type: Input the price value that will trigger your trade. Then choose which type of execution it will be: will it be a buy limit or a sell limit? Then also place the expiration of your order.
- Key in your stop loss order.
- Key in your take profit order.
Interested to Trade Silver?
We can’t emphasize enough:
Take advantage of the superior features that the XM platform provides by signing up for an account right now!
You will then appreciate the competitive advantage that is being offered to you by using this platform.
Please do not forget that it is extremely important to always manage your risk.