Tuesday, August 12th, 2014 by Tim Lanoue
Binary options traders of all experience levels constantly seem to be out on the prowl for the holy grail of trading strategies. Like I have said, and many other wise traders have also said, there is no such thing as the holy grail trading strategy. If you ever come across a website, article, or product that claims to be the “best” I would take it with a grain of salt. Many traders fall under the impression that the only way they will succeed if is they are using charting solutions and using indicators to predict trades, however, what many fail to realize is that using fundamental analysis can be just as effective as using technical analysis strategies. Moving forward we will cover what effects the price of silver and how it can be applied to a trading strategy.
Changes in Oil Prices
As a long time indicator for dictating changing prices of popular commodities, the change in the value of oil will indirectly effect the value of silver. If there is a large dip in the price of oil, you can see how the price of silver will also drop. However, if the price of oil starts to soar you can bet that the price of silver will also soar. This can be an extremely effective strategy to use when trading classic option style binary options.
Lessening of Dollar Value
Inflation and the decrease in the value of the dollar will directly effect the value of silver. Now this may be difficult to understand but when inflation occurs (meaning the price of the dollar value rises yet it loses value) the price of silver will more than likely decrease. Yes, thats right, decrease. On the other hand, if the price of the dollar value decreases then the price of silver will more than likely increase. It kind of has an adverse effect on the price of silver.
Nationalization of Silver
Although this is not a problem yet it could be a huge factor that could some day effect the price of silver. Peru is one of the largest producers of silver and if their president was to nationalize silver it would severely limit the amount of silver produced causing prices to spike to new, unimaginable highs. This is something definitely to keep an eye on because if done the price of silver would rise for months at a time, meaning you could ride up trends while trading binary options where you are more than likely to win every investment made.
Trading Silver Option ‘The Smart’ Way!
The use of charting solutions and indicators will always serve as the backbone when it comes to any style of trading. However, using fundamental analysis is an easy way to take advantage of easy trade opportunities without the use of trading indicators. The two constant things to be on the look out of are the prices of oil and the dollar value, these are the two most common factors that effect the price of silver. The nationalization of silver has not occurred yet and it may not but if it does make sure to take it for hard bull calls. Hope you guys enjoyed the article and best of luck trading! If you have any suggestions, comments or questions please feel free to leave them below!