Silver’s Market Manipulation Is Your Way In

You can feel like a victim knowing you are participating in a manipulated market, or you can jump of joy knowing this provides an edge for you. The choice is yours. Blaming trading losses on outside circumstances does not make you a better market participant. Instead, any abnormality like the open and close of a market, pre-announced news releases, or, in this case, a repeating pattern of market manipulation can be used in your favor. Trying to find fairness and alike within the markets is illusory. The markets reflect human behavior, and as such all humans have fear and greed and their variants deeply ingrained within them.h2 Silver’s market manipulation is your way in./h2

The only chance to participate in a rigged game and come out ahead is beating them in their own game. One way of stacking the odds in your favor is to recognize patterns within the markets, and market manipulation is just that, a pattern.

We believe strongly that silver prices will see new all-time highs by the end of the year. We also believe in a high probability for silver prices to reach near triple-digit price levels. And we know just because one knows direction and targets does not mean one arrives at these prices with a position intact or a position at all.

Here are a few examples of what we mean.

The minefield/h2

We tried to illustrate that a single event of chart characteristics could point towards volatility or otherwise trading instrument characteristics on the daily chart above. The sum of all variances of Silver events, although points clearly at aiming to discourage the investor and short-term traders alike. Typically the daily time frame is the entry time frame for longer-term plays like weekly and monthly time frame setups. It is challenging to find propper low-risk entry points. Here are the obstacles for the market participant to enter the market:

• dark cloud cover and bullish engulfing candlestick patterns are extreme reversal patterns typically much rarer in occurrence
• each range gets its highs and lows taken out which can be described “fishing for stops” (orange boxes)
• the sheer amount of yellow wicks shows the general volatility and challenges for low-risk stop placement
• consistent pattern failures
• follow up day retracement levels of 70 to 90 percent are outside the norm
• rare but extreme trend days irrespective of the market is trending or ranging

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Just to name a few.

But that is not all/h2

Since our recent chartbook release about spoofing activities in the silver market, we have been feverishly working on identifying various intraday market behaviors that are atypical to typical market behavior as a whole and the silver market specifically. Our findings confirmed that individual patterns aren’t uncommon, but the sheer sum of patterns is definitely not normal.

A look at the intraday 60-minute chart above, a time frame entry tool often used for daily and weekly time frame setups, is concerning:

• Every extreme gets faded.
• Reversal patterns are dominating the field.
• Previous days lows get gunned for stops.
• Ranges get spiked out for stops to be hit in both directions.
• Range expansions are happening in both directions.

And all this by observing just a few days back. There is much more.

The cure/h2

So what can be done? Let us rather focus on solutions versus a minefield of obstacles. The most predominant patterns we found were volume and time-based. A market this thick can not sustain manipulation through the significant market hour activity of the world taking place. Moves getting artificially faded mainly before the Asian session open and the British market open for Silver. To protect your risk, you need to enter the market at the following time slot and counter fade: 20:30 EST to 21:30 EST. We found this time segment the one of least risk when used in conjunction with our Quad exit strategy, which allows for risk mitigation by taking shortly after entry half of the position of the table.

The chart illustrates with green and red horizontal lines that at each day at this same time, an imminent move follows to allow for this first target of risk elimination to get hit. It also shows that volume increases at this point to substantiate a more real move versus the prior artificial fades. We also suggest trading small in size and instead build long-term position out of runners (again, view our Quad exit strategy).

In addition, we advise against scalping and frequent intraday trading. Instead, we find stepping away from the noise and trading monthly charts to be an intelligent way to protect wealth. The most secure way of participating in the Silver market is to accumulate physical holdings.

Silver’s market manipulation is your way in/h2

Pick your spots wisely. Overtrading in minefield conditions is risk expansive. A top-down approach from a longer-term directional perspective should guide when to engage in the market. The daily chart above shows one such substantial directional support. When prices reach the green line again (linear regression channel), the 60 min entry strategy based on time of day (20:30 EST to 21:30 EST) and a keen eye on your volume bars is vital to participate in a low-risk manner to get a piece of the pie.

One more thing! It is much more proficient to work with a volume-based support measurement tool (yellow line) for transactional support versus typical TA tools of horizontal support and resistance lines.

Silver’s market manipulation is your way in/h2

Market participation is an endless path of hurdles overcome and a honing of difficult to acquire skillset in a challenging profession. Market manipulation is as old as time. Complaining about it doesn’t benefit but your ego. Taking the role of a detective instead and examining the market with curiosity for its complexity of rules or, in this case, manipulated rules to then build in opposition a rule set that provides advantages for your market plays is a more proper approach.

Written By: Korbinian Koller