Resilience is the capacity to recover quickly from difficulties. In other words, toughness. Looking back over the last year, the world has experienced just such toughness. Unfortunately, this isn’t over yet. Maybe it’s even just the beginning, and much more is to come? We believe preparation is the wise course of action, but it needs a plan. Silver, Focus on resilience.
Silver’s price faces just the same strain. Much influenced by various strings pulling. It is essential to stay focused on the prime fundamentals and the clear long-term case for the shiny metal. Numbers for demand are overwhelmingly positive, and the fact that news coverage is strong doesn’t justify the temporary price dip to be principle-based.
Last year was a bumper year for hedge fund launches. According to a Hedge Fund Research report released towards the end of March, 614 new funds hit the market in 2021. That was the highest number of launches since 2017, when a record 735 new hedge funds were rolled out to investors. What’s interesting about Read More
It is not easy to be a contrarian, yet it is very rewarding. We firmly believe this to be another rare opportunity to add to one’s physical holdings of Silver.
The four cornerstones for resilience are:
- You. Take care of yourself first. A year without gyms, cooped up at home, and social isolation took a toll. Make sure you are balanced.
- People. No matter if corporate or family. We all went through this. As a result, people, worn out and making more mistakes, have changed. Don’t take your spouse and kids for granted. Treat your loved ones with extra care and renourish. They are your backbone. Accept that people essential to your business might not be as reliable as they used to be. Reevaluate partnerships and supply chains and have a watchful eye where your business is vulnerable. This is especially important if you trade with other people’s money.
- Technology. With supply chains banged up, it is wise to have backup systems in place and not expect smooth operations in case of extraordinary circumstances. Have necessary parts stockpiled and be self-dependent.
- Operations. Check your operations for their processes, people, and technology. Think risk control over efficiency. Form KYC to regulatory changes and increased fraud; this isn’t a time to streamline and maximize. Instead, set up systems to monitor compliance, strengthen your partnerships and supply chain reliance. Overall under the motto: “Never assume!” as we are now living in a world of fast change.
Weekly Chart, Silver in US-Dollar, Last weeks setup:
Silver in US-Dollar, weekly chart as of March 24th, 2021.
We posted this chart in last week’s Silver chartbook publication.
Weekly Chart, Silver in US-Dollar, Execution on the plan:
Silver in US-Dollar, weekly chart as of April 1st, 2021.
Since prices moved into our pre-planned entry zone of the yellow circle, we posted two entries live on our free Telegram channel. We were able to take already partial profits based on our Quad exit strategy to eliminate risk and are now holding two runners.
Sideways range entries like these with quick risk elimination are representative of resilience. One doesn’t know which one of these entries will be the one where the remainder position size will break through the upper boundary of the range. One doesn’t need to. As long as the entries are low risk, this engagement in a tough sideways zone with the clarity of great success once the range breaks in the direction of the trend supports persistent efforts.
Monthly Chart, Silver in US-Dollar, Silver-Focus on resilience, The edge on our side:
Silver in US-Dollar, monthly chart as of April 1st, 2021.
It is a misconception that one needs to be right to make money. But the ego constantly suggests us to find that best entry price. However, there is no such thing. We need to try resiliently until we get it right and control risk and reward ratios over sample sizes. An effort that requires a resilient mindset.
A look at the most critical large time frame chart above shows three crucial factors.
- A preceding strong directional leg from US$12 to US$30 indicating a trend.
- A very favorable risk-reward ratio for the large time frame players.
- And if you have a closer look within the red box, you will find excellent volume transaction support below the price we are trading right now.
Trading is a business no matter what time frame. You are in charge of wealth preservation and creation and you are the core anchor. Hence, you need to be in the best shape. Review your business plan and be aware that resilience requires a review of your breaking points. While we typically streamline business for efficiency, resilience points towards risk control and a look at dependencies. Ask yourself what can be learned from last year’s challenges and what can be done that similar surprise events do not negatively impact your business.
Silver, Focus on resilience:
Why did we pick this topic? Because trading and investment systems are only as good as their weakest link. With human error in trading being the number one equity curve killer, you are the weakest link. With change gaining speed, we find a top-down approach necessary to assure resilience to act upon the opportunities that change offers, maturely and fittingly. It isn’t business as usual; these times require extra preparation for the long haul.
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About the Author: Korbinian Koller
Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent.Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.