How long and how high

June 13, 2020

 

Wouldn’t we all like to know how long it takes till we make money on our investments, and how high prices will go? Most investors are already happy if they do not get stopped out of a trade. That is a far cry from what is necessary. One needs high quality projection tools to estimate realistic exit targets. Without these estimates being somewhat accurate, risk reward ratios for trades and investments can’t be calculated. Risk control is the core heartbeat of a trading system and your investment approach. The how long part of a trade is mutually essential, since exposed money also represents risk. What is already tied up into one trade or investment can’t be used elsewhere. Money management needs to know realistic time exposure measurements. How long and how high is therefore an essential question to be answered each and every time before entering a trade.

 

Silver, Monthly Chart: Building A Position For The Long Term

 

Silver in US-Dollar, monthly chart as of June 11th, 2020.

 

If you look at the monthly chart above you will find that even the worst fill price for a long position within the red zone finds a risk reward ratio of a minimum of 1:1 in the green bracket. We set that as our minimum standard for trades for our financing target (see our quad exit strategy ). As the chart shows there is plenty potential for trade development even if Silver “only” retests its highs from 2011. A target we find quite reasonable.

 

On March 19th, 2020, we shared with our Telegram members (see our free Telegram channel) that we find Silver, at the time trading below US$12 to be at a good time to acquire physically. Already a few days later the physical price for Silver moved away from spot prices and premiums exploded. We still advised the purchase of Silver to long term investors. To many it felt uncomfortable to pay up such a premium.

 

However, we were comfortable to pay up to US$19 for well known one ounce Silver coins like American Silver Eagles, Austrian Philharmonics and Canadian Maple Leaf over the following weeks. Why? Because for the truly long term wealth preservation the entry can be a variant. Hence, already now while the spot price of Silver is trading near US$18.00, some of these coins trade near US$30 on the open market. Even if the gap between the actually physical coin price and the spot price should narrow again, the factor that essentially matters is the risk reward ratio. A discrete bank independent insured and audited Swiss vaulting facility can improve your risk reward ratio dramatically as you save yourself some of the premiums and the potential VAT on your physical Silver investments.

 

We are famous for our extreme low risk approach in regards to entries and their relative stops. It is of utmost importance to realize where the true risk is in these long term physical holdings. Wealth preservation needs to address the risk of the value of fiat currency, which is nothing else but an underlying belief. This is one of the core reasons why we have such a scrutinizing look on Silver, with there being a limitation of products that ensure ones monetary well being in the future.

 

Monthly Chart, Silver: Projections Of How High

 

Silver in US-Dollar, monthly chart as of June 12th, 2020.

 

Let us have a closer look of what the future might bring. For nearly six years range players had quite a ball buying near US$14.00 and short selling near US$19.00.

 

Once US$19.00 breaks, we could see advances quite swiftly. The white line illustrates how we envision such a price movement. We perceive quite frankly a lot higher price levels for the very long term.

 

We do not want to evoke greed with this portrayed possibilities. Quite the contrary. We want to emphasize that a small starter position even at a price that on smaller time frames has seen some recent advances, is in context still very conservative.

 

Silver, Monthly Chart: Projections Of How Long

 

Silver in US-Dollar, monthly chart as of June 12th, 2020. c

 

Time in itself is quite a different animal and so it is in trading as well. Here is where analysis becomes speculation to a higher degree. Nevertheless we are confident with a certain probability that prices might see within 22 months advances in the Silver market that reflect a 3.5x from our entry point, and about 45 months before we hit our second  monthly target.

 

How long and how high
 

In principle the further out in time a guesstimate is attempted the less likely its’ accuracy. Nevertheless as a speculator this task needs to be mastered to the point to be accurate more often than not. So are we still advising to buy? That depends on your risk appetite. If you do not hold any silver at all and if the above mentioned numbers are in congruence to work for you as an expectancy than the answer is definitely yes. With fiat currencies at risk and the highly uncertain future of markets we find risk reward ratios even below 1:2.5 what we typically expect from a trade like this acceptable since in this case it isn’t all about getting rich – it is much more and primarily about wealth preservation.

 

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All published information represents the opinion and analysis of Mr Korbinian Koller & his partners, based on data available to him, at the time of writing. Mr. Koller’s opinions are his own and are not a recommendation or an offer to buy or sell securities. Mr. Koller is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations. As trading and investing in any financial markets may involve serious risk of loss, Mr. Koller recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

 

 

 

Although a qualified and experienced stock market analyst, Korbinian Koller is not a Registered Securities Advisor. Therefore Mr. Koller’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. Past results are not necessarily indicative of future results. The passing on and reproduction of this report, analysis or information within the membership area is only legal with a written permission of the author.

 

 

Important Trading Risks and Earnings Disclaimers - Terms of Use

 

RISK DISCLAIMER: All forms of trading carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Please ensure your chosen method matches your investment objectives, familiarize yourself with the risks involved and if necessary seek independent advice.

 

 

U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose.

 

NFA and CTFC Required Disclaimers: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose.

 

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CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

 

 

All information presented or any product purchased from this website is for educational and research purposes only and is not intended to provide financial advice. Any statement about profits or income, expressed or implied, does not represent a guarantee. This presentation is neither a solicitation nor an offer to Buy/Sell options, futures stocks or securities. No representation is being made that any information you receive will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. Please use common sense. Get the advice of a competent financial advisor before investing your money in any financial instrument.

 

Terms of Use: Your use of this educational website indicates your acceptance of these disclaimers. In addition, you agree to hold harmless the publisher and instructors personally and collectively for any losses of capital, if any, that may result from the use of the information. In other words, you must make your own decisions, be responsible for your own decisions and trade at your own risk.

 

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