How do i short silver?

What's the best way to Short Silver? After analyzing precious metals I feel they is more scope for them to fall. Can anyone who has experience in shorting precious metals chime in? Thanks

With silver going higher and higher you might be tempted to short the precious metal to take advantage of any correction that may occur. If you know how to short silver in the Comex you can make significant amounts of money when silver starts to fall. Before you even consider trading in the metals market you need to build up experience and have a sound strategy and money management rule in place to avoid significant losses.

The first thing that you have to do before you consider shorting silver is to check the charts and perform technical analysis. Technical analysis is using chart patterns and indicators where the underlying is the price to predict where the stock will be heading. Silver has been increasing in value significantly however the chart patterns and indicators are showing weakness in April 2011 and there might be an opportunity for silver short sellers to make money.

Once you have completed your technical analysis you need to check the fundamentals of the precious metals market and silver in particular. Check why silver has been advancing and whether there are any indications of it falling for example if there is silver mine discovery that will ease supply and drop the price. Once you have the fundamentals to warrant a short sale you can be confident with your trade.

Always assess your risk reward and enter the trade if the skew is 3:1 which means you can potentially make three times more than what you can lose. Always have a point where you will take your profit and have stop losses in place if the trade goes sour. With effective money management techniques you can really make money but also reduce the amount and frequency of the times you lose.

Many brokers have exposure to precious metals within the Comex and will offer your CFD’s and Put options on Silver. Once you are comfortable with your trade and have all the analysis you need to back up your decision you can enter the trade and then wait for the trade to mature. You need to be patient and keep on top of the trade by finding out what is happening and whether it is still worthwhile to keep the trade open. Remember you need a take profit level and a stop loss level along with timeframes and adhere to those rules.

Savvy investors always use as many ways as they can to mitigate their risk. If you can hedge your silver short position then you can have extra piece of mind. You need to find a positive correlation for silver so that if silver should rise and you have a short position you will make some money on the silver hedge to offset the losses you make on shorting silver. It is true that with a hedge you won’t make as much money compared to shorting silver outright however the reduction in risk and overall losses outweigh the profits.

If you are considering shorting silver then you need to be careful and have an effective strategy and research which backs up your decision. Always be disciplined and never enter a trade on the advice of tipsters.