A Complete Risk Management Framework for Silver Futures (SI)
SI is a thin, jumpy, unforgiving metals contract. Its ATR is large relative to size, spreads widen fast, and liquidity evaporates on news. If you don’t build a risk framework around those realities, SI will beat you into the dirt. This article gives you a professional-grade set of rules that actually work on SI—not generic risk platitudes.
1. SI ATR Defines Your Entire Position Size
ATR on SI isn’t optional; it’s the only way to size positions without getting slapped. Typical intraday ATR behavior (1m bars):
| ATR Range | Condition | Position Impact |
|---|---|---|
| 0.07–0.10 | Calm | Normal size |
| 0.10–0.18 | Elevated | Half-size |
| 0.18–0.30+ | High volatility | Quarter-size |
If you don’t cut size when ATR jumps, you will get stopped out by movement that wasn’t even directional—just volatility noise.
Read the deeper volatility explanation here: SI Volatility & ATR Profile.
2. Stop Placement Must Scale With Volatility
A fixed 5-tick or 7-tick stop is suicide on SI. Your stop must respect the current volatility environment:
- Low ATR → 6–10 ticks
- Medium ATR → 12–18 ticks
- High ATR → 20–30+ ticks
If your stop doesn’t scale with volatility, you’re not trading—you’re donating.
3. Never Trade SI Blind to the Spread
SI spread tells you everything about liquidity. SI’s natural spread:
| Condition | Spread | Meaning |
|---|---|---|
| Liquid | 1–2 ticks | Scalp-friendly |
| Normal | 2–3 ticks | Safe for most trades |
| Thin | 3–5 ticks | Size down |
| Danger | 5+ ticks | Avoid |
Most blown SI trades came from ignoring spread expansion—not bad entries.
4. SI Is Not Safe Off-Hours — Rules Required
Unless you enjoy slippage and random air pockets, off-hours SI trading requires strict limits.
Rules:
- Never enter large positions outside COMEX hours
- Avoid stops during Asia session—books are too thin
- Avoid holding tight stops near rollover windows
If you want to understand why, see SI Calendar Spreads.
5. Limit Orders Only in Thin Conditions
Market orders fill like garbage during thinner periods. If the spread is 4+ ticks, you must use limits or walk the order in.
Good SI traders survive by controlling their entries—not smashing the button.
6. Cap Your Max Exposure Per Trade
Here is a simple rule that prevents SI-induced account meltdowns:
Your total account exposure per SI trade should never exceed 1–2% of your account.
Because of the volatility and thinness of SI, treating it like ES or MES will bury you.
7. Avoid Trading Front Month During Roll Week
During roll week:
- spreads distort
- volume shifts unevenly
- DOM becomes unreliable
- liquidity pockets break apart
If SI starts acting “wrong,” it’s because you forgot to check the calendar.
8. Always Track the Active Contract
Once volume migrates, the old month becomes a trap. Low volume + wide spread = unnecessary losses.
Simple rule: trade the contract with the highest volume—not the one your platform defaults to.
9. News Events Are SI’s Kill Zone
SI reacts violently to:
- CPI
- PCE
- NFP
- FOMC
- Rate statements
If spreads widen before the event, stay out until the book stabilizes. SI will blow through your stop before you even see the candle form.
Final Takeaway
SI is an unforgiving contract. It pays well, but only if you’re disciplined about volatility, sizing, spreads, and off-hours behavior. This framework exists to keep you alive long enough to become competent. SI rewards good process and punishes everything else.