Silver has been on the move recently, and I want to walk you through one of my biggest trades on this metal—currently up around $17,000. More importantly, I’ll explain the process that led me into the trade, how I’ve managed it along the way, and the key factors driving silver’s price higher.

Technical Setup: Why I Entered

From a technical perspective, silver had a very strong breakout on the spot chart. To identify potential entry levels, I used Fibonacci retracement levels.

• Entry Point: The 38.2% retracement lined up cleanly with a past level of resistance that had turned into support. This confluence gave me confidence to take a long position.
• Initial Stop Loss: At first, I set my stop just below the 61.8% retracement, then adjusted it to just under the 50% retracement for tighter risk control.
• Momentum in My Favor: Almost immediately, price started moving higher. As silver pushed through resistance and formed new higher highs, I began trailing my stop upward to lock in gains while still giving the trade room to breathe.

This trailing stop approach means I’ll stay in the trade as long as the uptrend remains intact, but if price breaks down and fails to hold support, I’ll exit with profits.

Sentiment: Institutional Positioning

Beyond chart patterns, sentiment data has also been very supportive of silver. The latest Commitment of Traders (COT) report showed institutions buying aggressively:

• Adding long contracts
• Reducing short contracts

When institutional traders increase their exposure in this way, it’s often a strong sign of continued momentum.

Fundamentals: Macro Environment

Finally, the fundamentals provide the bigger-picture reason why silver (and gold) have been in demand.

• Sticky Inflation: Inflation remains elevated, reducing confidence in the U.S. dollar.
• Weak Labor Market: Recent jobs data came in far below expectations—just 22,000 jobs added versus a forecast of 75,000.
• Stagflation Risks: Slowing growth combined with persistent inflation creates an environment where investors often turn to hard assets like silver and gold.

These conditions line up perfectly with what we’ve been seeing in the EdgeFinder: consistently bullish scores for both gold and silver based on sentiment, trend strength, and economic data.

Key Takeaways

This trade is a good example of how I combine multiple factors into my decision-making process:

• Technicals help identify timing and risk levels.
• Sentiment shows what institutions are doing.
• Fundamentals explain the bigger picture driving demand.

For me, the plan is simple: trail my stop as price continues to form higher lows and higher highs on the 4 hour chart, which is the timeframe I used to enter the trade. If price breaks down, I’ll step out and take the profit.

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