Silver Chartbook – The Ultimate Question And Its Answer

With US elections looming many ask:” How deep will the retracement be? At what price do I purchase my physical silver?” If you think of it, this question is universal. In principle, it has no answer. No one can tell you if and by how much prices might retrace from current levels. That doesn’t mean there aren’t answers that solve the riddle principle-based. The ultimate question and its answer.

First, one has to admit that a question like this comes from a place of fear.

  • Fear of missing out (what if prices go higher from here and I am not exposed to the market).
  • Fear of being wrong (I do not know at what price to buy, what if I buy too early).
  • Afraid of a loss (What if I buy too early and get stopped out).

And the question also stems from greed (I want in, I want to buy cheap).

It is important to be aware of these origins since overcoming those is what’s needed for proper execution and trade/investment management.

Principle-based answers:

  • To overcome the fear of missing out, all you need is to purchase some silver. It doesn’t have to be a lot. Just enough that this feeling of standing on the sidelines subsides, enough to follow the market and have your interest satisfied.
  • To overcome the fear of being wrong, you need to accept that there is no way to be right since an individual trade is random in its outcome and it is impossible to guarantee to be right. You as a trader are not in the business of being right, you are in the business of executing an edge well in a field of probabilities.
  • The fear of loss is overcome by simply trading that small that you can accept the loss. A trade has to be that meaningless to you otherwise you have no chance of good execution. Over time, this amount will increase with the confidence gained.

Historically, we had Gold/Silver-ratios of 14 in the 1980ies, compared to 82 right now, but we see today’s world economic crisis unravel in a much more dramatic scenario. We have increased demand in cell phones, TVs, refrigeration, electric cars and solar panels for Silver. In addition, recycling Silver is extremely difficult and as such supply is diminished. These among other factors make us confident to predict future silver price levels in the triple digits.

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