Silver VWAP Reversal

Typically 1-4 high-quality setups (2+ SD touches with proper signals) per session, with the most appearing during the COMEX RTH window (8:25 AM - 1:25 PM ET) when volume is highest. Some days have multiple, others none. Don't force trades - wait for proper setups. On the thinner TSX ETF route, clean setups are even less frequent.

COMEX micro/standard silver (SIL/SI) is the route that genuinely supports this strategy - deep liquidity, tight ticks, near-24-hour trading, and real institutional VWAP flow - but it is USD-denominated and needs futures margin and a CIRO-member futures dealer. TSX silver ETFs (SVR/PSLV) are simpler CAD cash positions with no futures margin, but their intraday liquidity is far thinner, spreads are wider, and reversals are lower quality. Beginners often start on ETFs to learn the pattern, then move to micro futures (SIL) for genuine execution.

Because silver is priced in US dollars. If you trade COMEX (USD) or an unhedged ETF (PSLV, SVR.C, HUZ), your CAD result also reflects USD/CAD moves. The CAD-hedged iShares unit (SVR) removes most of that currency noise. When you size a COMEX trade in home-currency terms, convert the USD tick value to CAD at the prevailing rate.

Price can exceed the VWAP bands significantly on trend days without reversing. Entering simply because price touched a band leads to catching falling knives. The reversal candle confirms that buyers/sellers have actually stepped in and are willing to push price back. No confirmation = no entry, regardless of deviation.

On liquid COMEX silver, market orders work well for reversals because timing is critical - once the reversal candle confirms you want to be in immediately. For less extreme setups (1.5 SD) a limit at a slightly better level can work. On a thin TSX ETF, prefer limit orders and mind the spread - a market order can pay an ugly fill.

Spike-and-reject shows an immediate reversal candle after the spike, a volume climax on the spike followed by declining volume, and price quickly returning inside the band. Trend continuation shows price staying beyond the band after the initial spike, volume remaining elevated, and subsequent candles continuing in the spike direction. Wait at least one candle after the extreme to assess.

Generally no - VWAP is an intraday indicator that resets each session, and the reversion thesis is about returning to TODAY's average price. Overnight holds face gap risk; COMEX silver in particular can move sharply on the Globex overnight session, and the next day's VWAP will be different. If a trade hasn't reached target by session end, exit and reassess fresh.

Canada's superficial-loss rule denies a capital loss if you (or an affiliated person) repurchase the same or identical property within 30 days before or after the sale and still hold it at period end - and it treats two ETFs tracking the same silver benchmark as identical. For genuine day traders whose gains are business income this is less relevant, but it matters for anyone treating positions as capital. It is a key reason active intraday traders should clarify their CRA classification early.

Look for confluence between VWAP bands and Volume Profile features: Value Area High/Low, Point of Control, and High Volume Nodes. When the -2 SD band aligns with the VAL or an HVN, support is stronger. Check for Low Volume Nodes between current price and VWAP - price moves faster through LVNs, so reversion may be quicker. This works cleanly on COMEX; on a thin ETF the profile is sparse and less reliable.

Use a tiered stop: an initial entry at 2.0 SD has its stop at ~2.7 SD. If you add at 2.5 SD after new signals, keep the same stop (~2.7 SD) for both - don't move it further out. Your average entry improves but maximum risk stays constant. If price breaks through 2.7-3.0 SD without reversal, both positions stop out - it's a trend day.

Institutional VWAP execution algos are programmed to buy below VWAP and sell above it. At extreme deviations they become more aggressive because price is far from their benchmark, creating natural buying pressure at lower bands and selling pressure at upper bands that mechanically supports mean reversion. This dynamic is strong on the deep COMEX silver book; it is essentially absent on a thin bullion ETF, which simply tracks the metal.

The most impactful: (1) VWAP-slope filter - only trade when the slope is below ~8-10 ticks/hour (eliminates trend days). (2) Time filter - avoid the first and last 30 minutes; favour COMEX RTH. (3) Minimum deviation - 2.0 SD minimum. (4) RSI extreme - require RSI <30 or >70 in addition to the band touch. (5) Volume climax - require a volume spike at the extreme. Combining these typically lifts the win rate from ~55% to 65%+.

Large institutional prints near VWAP bands often signal that accumulation or distribution is completing. After a series of large buys near the -2 SD area, the next visible price action is frequently the reversal as buying pressure establishes. This read is meaningful on COMEX-linked silver flow; on a thin TSX ETF there is little such flow to observe, so don't rely on it there.

For expected range days, sell an iron condor with short strikes near the ~2 SD bands (collecting premium from theta) and buy long wings near ~3 SD for gap protection; or sell strangles if comfortable with naked risk. For individual reversals, buy spreads at extremes rather than naked options to reduce premium cost while keeping directional exposure. In Canada this is done with COMEX silver options (USD); there is no liquid domestic silver-ETF options market.

In high-volatility regimes (ATR elevated 50%+ above normal): widen band thresholds (require 2.5 SD instead of 2.0), reduce size, and expect larger reversions but also larger failures. In low-volatility regimes: tighten thresholds (2.0 SD sufficient), expect smaller reversion profits, and increase size to compensate. Track the 20-day ATR percentile to identify the regime and recalibrate band thresholds periodically against realised volatility - silver's industrial sensitivity makes its volatility regime shift faster than gold's.