Trading silver futures is one of the commodity trading instruments available with most online forex brokers. Trading in silver is quite similar to currency trading and those who are familiar with trading forex can easily venture into trading spot silver or silver futures online. It falls under the ‘Commodities’ or ‘Precious Metals’ sector and is traded in an exchange such as the COMEX in New York.
The only difference comes from the fact that trading silver futures requires a different approach and in most costs, the price of silver is usually inversely proportional to the US dollar. For example, a strong USD could mean that Silver can be bought cheap and vice versa. The trading symbol for spot silver is XAGUSD (silver v/s US dollar) or XAGEUR (silver v/s Euro)
Trading in silver goes back to ancient days and was in fact used to mint coins. This led to a direct relation between the cost of the silver coin, thus indirectly setting the price of Silver. Precious metals including Gold have often been traded in the past and in only recent times did the world shift to fiat currency that we now use. Although Gold is usually the most preferred and commonly traded precious metals, silver comes in at a close second. Besides these two, you can also trade other precious metals such as Platinum or Palladium, which are the lesser known precious metals.
There are many ways to invest or trade in silver online and these include trading silver CFD’s, ETF’s and other such investment tools. Of course, the strategy and approach to trade these investment products differ a lot. Therefore, for those new to investing in silver, it is best to start off with spot silver before venturing into other investment products.
Making profits from trading silver is indeed possible and there are many forex brokers today that offer spot gold and spot silver trading. But the most beginner friendly broker to trade with is RoboForex , you only need to open an account with as low as $10 and trade 0.10 lots of Silver. For experienced traders, trading spot silver and gold for that matter is usually a case of diversifying their trades in order to mitigate their risks better. However, there are some traders who purely trade spot silver and nothing else.
The basics of trading spot silver is similar to that of forex trading and the strategies are pretty much the same. For example, just as you would use the RSI indicator for a currency pair, the same indicator can be used for silver as well. Furthermore, spot silver prices are usually influenced by inflation and other similar economic factors that tend to affect currency prices as well.
Compared to forex currency pairs, silver is less volatile, however there are moments when silver prices tend to fluctuate a lot. Day traders can take advantage of this aspect and be able to profit from the volatile pricing that happens every now and then with silver trading.
For beginners who are reading this article, do not mistake trading silver online as investing in silver. Rather, you only speculate on the prices. Another popular way to trade precious metals is that some investors usually buy physical bullion bars and coins. This form of investment is a bit risky and comes with higher responsibility. For example, you need to find a vault to store your silver or gold bars/coins. Also delivering the physical good can often turn out to be a nightmare. And last but not the least, the investment required to buy physical gold or silver requires higher capital.
Considering the above, speculating on spot silver prices with your forex broker can be a better alternative. You can start off with as little as $5 or $50 and even more and start trading silver to make profits.