Reading Silver Charts: Sessions, Gaps, False Breakouts and Historic Spikes

What you will learn

• Where silver trades around the clock and when liquidity is thin.
• How to measure a weekend gap and the slippage it can cause.
• How to filter false breakouts and stop runs around obvious levels.
• What the spikes of 1980, 2011, 2021 and 2025–2026 teach about tail risk and crowd behaviour.

Explanation

The Gold course covered trading sessions and the news calendar, and the Technical Analysis course covers market structure and breakouts. This lesson adds what is specific to silver charts.

Where and when silver trades

• London: the over-the-counter (OTC, directly between banks and dealers) market for physical silver. The LBMA Silver Price, the daily benchmark, is set in an electronic auction at 12 noon UK time.
• New York: COMEX futures on CME Globex trade from Sunday 5:00 p.m. to Friday 4:00 p.m. US Central Time, with a one-hour pause each day.
• Asia: the Shanghai Futures Exchange also trades silver futures. During Asian hours, dollar silver is usually less liquid; check current exchange hours.

Liquidity means how much can be traded near the current price without moving it. When it is thin (Asian morning, the daily pause, holidays), spreads widen and a few orders can push price through a level.

Weekend gaps

Between Friday's close and Sunday's open nothing trades, but news continues. A gap is the jump between the two prices. A stop order inside the gap becomes a market order and is filled at the first available price. Measure gaps in percent and in ATR units.

False breakouts and stop runs

A false breakout is a move through a level that quickly reverses. A stop run is a brief push through a level where many stop orders are likely placed, such as round numbers ($30, $50), the previous week's high or low, or an old record. Practical filters:

• Use weekly levels (weekly high, low and close) as the main map; intraday levels break more easily.
• Accept a breakout only on a daily close beyond the level plus a buffer, for example 0.25 × ATR.
• Place your stop beyond the level by an ATR-based buffer, not on the round number, and size for that wider stop (lesson 8).

Historical spikes: lessons in tail risk

These are historical observations, not patterns that will repeat.

Worked example

Hypothetical example: spreads and fees are excluded.

1. Breakout filter: weekly resistance $50, daily ATR $1.50. Valid breakout only on a daily close above $50 + 0.25 × $1.50 = $50.375. During Asian hours price spikes to $50.60, then closes the day at $49.40: no valid breakout.
2. Weekend gap: you hold 200 oz long. Friday close $40.00, stop $39.50, planned loss 200 × $0.50 = $100. Sunday opens at $38.80: gap ($38.80 − $40.00) ÷ $40.00 = −3%. The stop fills near $38.80, so slippage is $0.70 per oz and the loss is 200 × $1.20 = $240, 2.4 times the plan.
3. Tail move in ATR units: if silver trades at $100 with an ATR of $4 (4%) and falls 30% in a day, the move is $30 ÷ $4 = 7.5 ATRs.

Common mistake

Practice activity

Hypothetical: you are short 300 oz of silver from $31.00 with a stop at $31.60. Friday's close is $31.20; the market opens on Sunday at $32.10. (a) Calculate the gap in percent. (b) Calculate the planned loss and the likely actual loss. (c) Name one filter from this lesson that could have changed the plan.

Key takeaways

• Silver trades nearly around the clock, but liquidity is thinner in Asian hours, at the daily pause and on holidays.
• Weekend gaps turn stops into market orders; measure gaps in percent and ATR.
• Use weekly levels, a closing rule with an ATR buffer and wider, correctly sized stops against false breakouts.
• 1980, 2011, 2021 and 2025–2026 show rule changes, margin hikes and crowd moves far beyond normal ATR.

Next step

In the next lesson you will analyse silver mining equities and streaming companies and see why they can fall even when silver rises.