Welcome to Trading Brokers step by step guide to trading silver online. Here you will find an easy to understand explanation of silver trading. This includes how to trade silver online, what you need to trade silver and how to open a trading account with a broker so that you can start trading silver online today.
Maybe you have heard of silver trading online or through a friend. Perhaps you are looking to trade and are curious about the different options available to you. Whether you are looking to speculate, invest or just learn more, this guide on how to trade silver can help you along your journey.
Throughout history, silver has been synonymous with currency and has been regarded as a form of money and store of value for more than 4,000 years. The reason a British pound is called a pound is because it used to be the equivalent to a pound of silver. The words for silver and money are exactly the same in an impressive 14 languages.
By its very classification as a “precious metal”, silver finds itself in a small group of valuable commodities that includes gold, platinum, and palladium. This beautiful white metal has always been in demand because of its unique characteristics and relative scarcity. While demand for silver has been constant, prices can fluctuate frequently.
One of the most popular ways to trade silver is via CFDs (contracts for differences). These financial instruments allow traders to speculate on both rising and falling prices without actually owning the underlying asset which is silver in this case. This can be more convenient for some traders and means there is no need for storing or securing physical quantities of silver.
Traders would open long (buy) positions, if they think the price of silver will rise or short (sell) positions if they thought that the price of silver will fall. The difference in silver price between the entry and exit is the traders realised profit or loss, excluding any broker commission and fees.
The most common silver CFD instrument to trade on is XAGUSD. This is silver priced against US dollars. With a trading broker, users can speculate on the price of silver (XAGUSD), as well as on other related markets such as XAGAUD which is silver priced against the Australian dollar.
The majority of brokers who offer silver CFD trading will provide access to leverage which enables a trader to control a larger position size with a small deposit. For example, an account balance of $1,000 with 1:5 leverage, could theoretically take a position size of $5,000. Whilst this can increase profit potential, it also significantly increases risks and the potential loss from a trade. Therefore, it is imperative traders have a clear understanding of how leverage works and the risks involved.
ASIC, BVI, CBI, FFAJ, FSA, FSCA, IIROC
Min $100 Deposit
FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF
Min $250 Deposit
ASIC, CySEC, IFSC, DFSA
Min $5 Deposit
ASIC, CySEC, FSA
Min $200 Deposit
ASIC, FCA, DFSA, SCB, CySEC, BaFin, CMA
Min $200 Deposit
The price of silver is driven by speculation and supply and demand, like most commodities. The price of silver is notoriously volatile compared to that of gold because of the smaller market, lower market liquidity and demand fluctuations between industrial and store of value uses. Understanding the pricing trends for silver requires a careful study of a number of different factors including:
All of these influences are a form of fundamental analysis which can be used to help try and anticipate future price movements. Some traders would combine fundamental analysis with other market analysis such as technical analysis, price action analysis and sentiment analysis to form a more complete trading strategy. It really depends on your individual goals and preferred trading style.
Although perhaps not being considered as rare or as valuable as gold, there are still a few benefits that make trading silver markets an attractive proposition in its own right. This includes:
If you have taken the time to read through the above, you should hopefully have an understanding of how to trade silver. Here is a summary of the key steps:
Trading silver online carries an element of risk and can take more time than other forms of investing. You will need to research the silver market, manage your positions, follow market news and decide how to react to it. It is important to understand the risks and dedication that comes with trading silver online.
Before trading silver, it is imperative to learn as much as possible about investing and trading online. Any mistake could prove to be costly. There is an abundance of free educational materials provided by many online silver brokers that can help you to improve your trading skills and knowledge.
Most silver brokerages will also provide a free demo trading account so that you can practice trading silver online with virtual funds in order to familiarise yourself with the trading platforms and practice your trading strategies until you feel confident enough to open a real trading account.
In order to trade silver online, you will need a broker account and trading platform to execute your trade positions through to the market. When choosing a broker, there are a few important things to consider such as regulation, commission fees, platforms, tools, education, funding options and customer support.
If you do not have the time to research brokers, you can see a list of our best brokers that we have already prepared to help traders. If you would like to know more, you can also view our detailed guide on how to choose a trading broker.
If you have made it this far then you may be ready to start trading silver online! The next step is to research the silver market to help increase your knowledge. The best brokers should have this information conveniently displayed for you within their trading platform.
Some of the most important factors that can help determine silver trading performance can be the trading plan and discipline. It is important to have a solid trading plan personalised to your own needs that includes the money management and trading strategy that you will use. Most experts and professional traders would try to not let negative emotions such as fear, anger and greed affect their trading strategy.
Once you feel ready to trade silver online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on silver, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of silver trades for the long-term, whereas traders may buy and sell silver on a daily basis.
Silver trading is a popular choice for long-term investors and active traders. It can be suitable for scalping, day trading and swing trading. Traders who would usually trade forex, trade stocks, trade indices, trade commodities, trade cryptocurrency, may look to diversify their portfolio.
However, it is important to understand the significant risks involved with trading silver online, especially when using leveraged positions. Most experts would suggest trading on a demo account with virtual funds to begin with.
This can be a useful way to familiarise yourself with how to trade silver and using trading platforms whilst allowing you to practice your trading strategies until you feel confident and produce consistent results. Most silver brokers provide unlimited demo accounts free of charge.