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3 Stocks that Can Grow This Autumn

Author: Eugene Savitsky

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Dear Clients and Partners,

The stock market cannot live without tart topics; investors always need something to anticipate. An increase in the interest rate? Uncertainty is really tiresome. Inflation? Jerome Powell told us not to worry, and we shall not for the time being.

What is left? Well, autumn is coming, and this means the number of respiratory diseases will become more frequent. And this, in turn, means COVID-19, only the Delta type.

More people go to hospital in the USA

People’s fears about the new coronavirus type are rather fair. On August 2nd, 10,000 people were put to hospital just in Florida and Louisiana, which is the absolute high since the beginning of the pandemic. This did not lead to a new quarantine yet, but wearing masks is now a must. Healthcare workers also fall ill, and this makes things even more complicated because there is a personnel shortage in healthcare institutions. The government is calling for total vaccination.

If earlier there used to be more elderly people among those put to hospitals, these days younger people, i.e. the active part of the population, fall prey to the virus more often. This might turn out to be a bad influence on business.

Should we wait for a crisis in autumn?

Will lockdowns of last year repeat themselves? I quite doubt this. What would they need vaccination, otherwise? Will they admit that it was a waste of money?

It would be too simple. Stocks would fall by 50-80% again. Investors would rush at buying them, knowing what was to follow, and absolutely everyone would make money. Like fun.

Each new crisis goes by a scenario that never came to life before, and the repetition period is much longer than a year.

Zoom Video Communications shares are growing

So, do investors indeed fear a new wave of COVID-19? Yes, they do. The media are speculating on this all the time, making market participants nervous.

The most prominent beneficiary of COVID-19 in 2020 was Zoom Video Communications, Inc. (NASDAQ: ZM). The last steep growth of its stocks from 350 to 400 USD was propelled by the expectations that the company’s services would become popular again with a new quarantine.

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In this chart, we can see the pair sky-rocketing in 2014 due to the Ukrainian events and imposing sanctions on Russia.

The growth lasted for almost 2 years. If the average daily volatility is about 30-50 kopecks, during that period it kept growing, reaching 27 rubles at times. Only the decisiveness of the CB and interest rates lifted by 17% managed to stop this.

Closing thoughts

Information hurricane around the Delta strain will only speed up, and market players will sometimes pay attention to the issuers that have experienced a positive influence of lockdowns.

The worst scenario is a new quarantine imposed, in which case companies that have gone deeper in debt will be threatened bankruptcy, and airlines are most vulnerable here. In autumn, avoid companies deeply in debt and with a small free money flow.

As for delivery services, they have enough money to pay off their debts, buy back shares, and pay dividends. There is always a risk, of course, but there it is minimal.
Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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What Is Russell 2000 and How Does It Differ from S&P 500?

Author: Victor Gryazin

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Dear Clients and Partners,

This overview is devoted to a popular stock index Russell 2000: its contents, its differences from the S&P 500, and ways of trading it.

What is Russell 2000?

The Russell 2000 index (US Small Cap 2000) is one of the leading global indices based on the stock prices of 2,000 companies with small capitalization traded in the USA. The index was created in 1984 by the Frank Russell Company, a part of the London Stock Exchange. Russell 2000 is called a wide market index among small companies as it represents stock price dynamics of tier 2 and 3 companies.

The Russell family consists of several indices, the most famous of them being:

  • Russell 3000 is an index based on the stock prices of 3,000 largest public companies registered in the USA. Their overall capitalization makes up for 97% of the American stock market.
  • Russell 2000 is an index consisting of 2,000 smallest companies of the Russell 3000 index.
  • Russell 1000 is an index that tracks 1,000 stocks with the highest rating from Russell 3000.


Russell 2000 is the most popular index among investors who hold shares of companies with small capitalization. Investors usually track this index to assess the market efficacy of small enterprises, mostly working for the domestic market. As long as there are so many companies in the index, your portfolio automatically diversifies.

Leading companies of Russell 2000 include startups in the spheres of healthcare, food, and consumer goods. Russell 2000 is calculated based on capitalization-weighed stock price of all the companies in it. The index gets revised every year, some companies being removed from and some added to it.

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How does Russell 2000 differ from S&P 500?

  • The number of companies: S&P 500 uses the shares of 500 largest companies, and Russell 2000 – the shares of 2000 smaller ones.
  • Capitalization of companies: S&P 500 tracks the leading companies; it is meant for investors who hold the shares of large enterprises. Russell 2000 demonstrates the state of affairs in small companies; it is meant for investors who hold small but promising shares in their portfolios.
  • Volatility: depending on the current market conditions, the volatility of S&P 500 and Russell 2000 may differ. At certain times, one index demonstrates better volatility, while the other comes to the scene as soon as the situation changes.
  • These two indices have both differences and common features. S&P 500 is a wide market index that includes companies with the highest capitalization, while Russell 2000 is a wide market index with a low capitalization. The main differences are as follows:


On the whole, regardless of all the differences, S&P 500 and Russell 2000 have been showing similar dynamics.

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How to trade Russell 2000

First of all, Russell 2000 is a most popular investment instrument but it can be used for short-term trading as well. Thanks to a wide range of instruments (ETFs, futures, options, CFDs) for trading Russell 2000, different strategies may be used.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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Why Is It Time to Invest in China? 3 Promising Companies for Investing

Author: Eugene Savitsky

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Dear Clients and Partners,

This overview is devoted to a popular stock index Russell 2000: its contents, its differences from the S&P 500, and ways of trading it.

What is Russell 2000?

The Chinese government would never leave stock market investors in peace. After the market of commercial education was destroyed, which was confirmed by the 90% decline of the share price of New Oriental Education & Technology Group Inc. (NYSE: EDUCATION), TAL Education Group (NYSE: TAL), and Gaotu Techedu Inc. (NYSE: GOTU), any criticism of any sector of business becomes a signal for new tough regulations. For example, a banal article in the state-controlled media, in which online games were compares to "spirit opium" for adolescents, led to a decline of the share price of such companies as Tencent Holdings Ltd ADR (OTC: TCEHY), NetEase Inc (NASDAQ: NTES), and Bilibili Inc (NASDAQ: BILI). However, even in such circumstances, investors show interest towards Chinese companies.

The famous ARK Invest manager Cathie Wood earlier sold Chinese stocks with a loss, but after JD.com (NASDAQ: JD) and Pinduoduo (NASDAQ: PDF), she decided to invest in Chinese companies again. All in all, market players see the risks of investments in Chinese companies but cannot withstand the temptation to buy stocks.

In this article, I suggest taking a look at the Chinese market and tell you about 3 companies the shares of which might grow when business regulations in China stabilize.

Who is the real rival of Tesla in China?
We have got used to thinking that the main rival of Tesla (NASDAQ: TSLA) in China is NIO. But if we look at the statistics of cars sold in the Chinese market in Q2, we will see that this is a misleading idea. By the end of Q2, Boyd Gaming had sold 54,841 fully electric cars. NIO sold 21,896 electric cars. Tesla sold 61,745 electric cars in China, so Boyd Gaming looks more like the main rival.

Apart from electric cars the company also sells hybrid vehicles, and in this sector, dynamics are positive every month. For example, in July Boyd Gaming sold 50,492 hybrid cars, which is 170% more than in July 2020.

The advantage of Boyd Gaming against such Chinese car-makers as NIO, Spent, Like auto, is that the former is profitable. By the end of Q2, it had venerated 113 million USD of net profit.

Buffett invests in director-general of Boyd Gaming Corporation

There is one more detail that might seem tiny yet it supports the idea of investing in Boyd Gaming. 11 years ago, Warren Buffett broke his rule to invest in those companies the business of which he understood and invested in Boyd Gaming. He later admitted that he knew little about either electric cars or batteries. Buffett was impressed by the director-general of the company Wáng Chuánfú, or, more precisely, the description of this person given by Buffett's affiliate Charles Munger. Munger told the Fortune Magazine that "the guy" was a combination of Thomas Edison and Jack Welch. Something like Edison on the technical side and Welch in the sense that he did what he wanted to.

That time Berkshire Hathaway bought 10% of Boyd Gaming. On the chart of 11 years ago, the shares cost about 10 USD. Last spring, the stock price dropped to this level but then aimed directly upwards. Now the shares cost 62 USD. It is important for us because Wáng Chuánfú does still manage the company.

Tech analysis of Boyd Gaming

Previously, Boyd Gaming shares bounced off the 200-days Moving Average and are trading above it, which indicates a prevalent uptrend. The nearest resistance level is 65 USD. If the price breaks it away, it will grow again and renew the all-time high of 71 USD.

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Bottom line

The Chinese authorities are trying to improve the demographic situation in the country, so they are now busy looking for those in charge of the slow-down in this sphere (the law one family-one child is apparently forgotten). As a result, the stock market is in turmoil as no one knows when those responsible will be punished and who turns out to be blamed. In the meantime, the government fights monopolies, which makes the market even more nervous. The market is also getting cleaned from companies that cannot pay off their debts, i.e. the authorities reject to help. All this makes investments super risky, so think of it if you decide to put your money in Chinese companies.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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How to Trade by Day-Hour Strategy?

Author: Andrey Goilov

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Dear Clients and Partners,

Looking for signals on larger timeframes and then confirming them on smaller ones is quite a widespread strategy. Even in John Bollinger’s book on graphic patterns traders looked for graphic patterns in D1 charts and then switched to other TFs to wait for the same patterns to appear on them.

The Day-Hour trading strategy is exactly such a way of medium-term strategy, by which the trader searches for entry points on daily charts, then opens an H4 and assesses the strength of the signal on it. However, you do not need to look for any graphic patterns, as this type of trading is highly subjective: one trader sees one pattern, while another trader can see an absolutely different one at the same place of the chart.

By this strategy, the trader only cares for signals from technical indicators. This makes trading completely objective.

Which indicators to use for Day-Hour?

This strategy requires use of indicators. The first one is the usual Moving Average. The indicator is easy to use:

  • If the price is above the Moving Average, then the trade is bullish, hence look for signals confirming the growth;
  • If the price has dropped under the MA, the trend is bearish, and you need selling ideas.


The other two indicators used in the strategy are oscillators: the MACD and RSI.

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Most often, traders use a trend indicator and one or more oscillators to look for signals that confirm the trend.

All in all, add to the chart the following indicators:

  1. Moving Average (3). The “shift” parameter is also at 3. The line will be shifted three candlesticks to the right. This indicator is necessary on the daily chart.
  2. The MACD with the parameters 12, 120, 5. This is an indicator fir H4.
  3. The RSI with period 9. The overbought level is 70 and the oversold area is 30. This oscillator is also for H4.


All these indicators can be found in the standard settings of MetaTrader 4, MetaTrader 5, or R Trader. This is a huge advantage as you do not need to download or install anything extra.

Closing thoughts

The Day-Hour strategy is meant for trading the trend, as one of the main traders’ rules goes. For a decent market entry, the strategy implies analyzing both D1 and H4 of the instrument. This method decreases risks and gives a chance a catch a good movement on the D1.

The drawback of the strategy is that it remains valid only when there is a good movement on the chart. When the price is in a flat, the trader will constantly be seeing breakaways of the MA up and down, which might entail a series of bad trades. On the other hand, opening a position by a trend that is just beginning, you never know what levels it might reach.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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NZD/USD in Detail: How to Trade Kiwi Dollar?

Author: Igor Sayadov

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Dear Clients and Partners,

NZD/USD: brief history

The full name of NZD is New Zealand dollar (NZ$). Its story began in the 1970-s as a result of talks inside the International Monetary Fund. There were made several decisions about free conversion via a floating rate based on the supply-demand balance in the market

Until 1967, the New Zealand national currency was bound to the British pound and called New Zealand pound. In 1967, New Zealand dollars were first printed and bound to the exchange rate of the USD. In 1973, the floating bind to the American dollar changed for a bind to a basket of the currencies of the main trade partners. However, even such an alteration in dependence did not save the economy of New Zealand from major crises of the 20th century. Nonetheless, NZD/USD is nowadays one of the 8 most popular currency pairs in For example. Among traders, this pair is frequently referred to as Kiwi dollar because this bird is imprinted in a 1 dollar coin. Kiwi is a national symbol of New Zealand.

How to trade NZD/USD in Forex?

You can trade NZD/USD by fundamental analysis, tech analysis, or indicators.

Trading by fundamental analysis

Fundamental factors are:

  • economic news
  • political news influencing the economy
  • decisions of the CB on the interest rate.


You can trade short-term on economic news or medium-term on political events and CB decisions on the interest rate. As an example, see attached a D1 at the moment when the interest rate decision was announced on August 20th, 2021.

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The market started growing on August 20th right when the CB announced that it was going to leave the interest rate at 0.25%. At the same time though they promised it would have risen to 0.5% by the end of the year and to 2% by 2024. The market thought of this news as of positive and started buying. As you see, the price grew quite noticeably, which means market players will soon take the profit. Another factor that influenced traders was the growth of quotations in commodity markets.

Closing thoughts

NZD/USD is a major pair that is frequent in the portfolios of most traders. High volatility attracts market players from all over the world. However, to make a profit, you need a good trading strategy that goes by the rules of Forex trading. For signals, you can turn to the standard set of indicators installed to MetaTrader 4 and MetaTrader 5. Try to use at least two indicatore so that the second one confirmed the signals of the first one. Set up the indicators for your trading strategy specifically.

I recommend beginners creating their own trading strategy and testing it on a demo account. If the results are good and stable, start working on a real account.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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RoboForex: important information relating to the .DE30Cash (GER30) instrument

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Dear Clients and Partners,

We’re informing you that the formation principle of the German stock index, which is represented in our platforms as .DE30Cash and GER30, will be changed. Starting from September 20th, it will consist of 40 assets instead of 30 assets earlier.

Changes in MetaTrader 4/5 platforms

On September 18th-19th, .DE30Cash and DE30Cash will be switched to the "Close Only" mode in MetaTrader 4 and MetaTrader 5 platforms. All pending orders in these instruments will be deleted. At the same time, "Stop Loss" and "Take Profit" levels in open positions will remain intact.

If you have open positions in these instruments, you need to close them before December 30th, 2021. All positions that remain open at the end of the trading session on December 30th, 2021, will be closed during the trading session on December 31st, 2021, at the quotes valid at that moment.

Starting from September 20th, 2021, instead of .DE30Cash and DE30Cash, you will be able to trade .DE40Cash and DE40Cash respectively. Please consider this information when planning your trading activity and reconfigure trading algorithms affected by the above-mentioned changes.

Changes in the R StocksTrader platform

In the R StocksTrader platform, the existing instrument, GER30 will be renamed to GER40 on September 18th-19th and it will affect both new and open positions. Starting from September 20th, the instrument will be available for trading as usual.

Sincerely,
RoboForex team

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Best Short-term Strategies: GBP/JPY Range

Author: Andrey Goilov

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Dear Clients and Partners,

Trading GBP/JPY might be quite tricky because it is so volatile: its average volatility range exceeds 100 points. However, closer to the Asian trading session the market calms down and sometimes forms a range, pushing the pair out of it by the main trend.

A short-term strategy called GBP/JPY Range uses no indicators; it includes pending orders which shortens your time in front of the terminal. Moreover, working by the strategy, the trader does not choose or forecast the market direction but simply follows the price.

The article is devoted to the idea of this strategy, its trading principles, and to generally checking whether the authors of the strategy have managed to pacify such a volatile pair.

Description of GBP/JPY Range

For trading by the strategy, we use the M15 chart of the GBP/JPY pair. Stick to the closing time of the American and opening time of the Asian sessions. This is 23:00-02:00 terminal time.

Draw horizontal lines through the high and lows of the price in the mentioned timeframe. Then place pending orders for breakaways a bit higher and lower than the drawn levels. If one order gets triggered, delete the second one. If none is triggered over 4 hours, delete both and try again on the next day.

Note that the narrower the corridor, the less it is possible that a strong movement will develop. If the range is quite wide, it is unlikely that the movement will continue after the breakaway. In practice, higher volatility changes for lower, then for higher, and over and over again. It is important that we notice low volatility to catch higher volatility later.

If the channel is wide, volatility is high, hence, there will be no movement after the breakaway. By the rules of the strategy, if the channel is over 70 points wide, you should not trade.

Selling by the GBP/JPY Range

As an example of a selling trade, let us take a breakaway of the channel downwards. We mark the beginning of the channel at 23:00 (11 p.m.); the low of the channel is at 152.74, the high is around 152.86. At 03:00 (3 a.m.) the lower border of the channel was broken, and the price went down. Place a Take Profit at the level of two ranges. This time, the movement was strong and triggered the TP at 152.50.

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In this strategy, we need a Sell Stop pending order as it opens a selling position below the current market price. By the strategy, we must place it 2 points below the low of the range. In our case, it is 152.72.

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Place a Stop Loss behind the high of our range to avoid random price movements against our position. Hence, we place it at 151.95.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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How to Trade Morning Star and Evening Star?

Author: Maks Artemov

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Dear Clients and Partners,

This overview is devoted to two reversal candlestick patterns: Morning Star and Evening Star.

These two are definitely rare visitors to charts, yet they remain quite popular. Like other reversal patterns, the Morning and Evening Stars form at the highs and lows of the price and contain three candlesticks each.

How does a Morning Star form?

This pattern forms at the lows of the price chart. When a descending impulse is going to subside, the price makes a minor surge upwards, so that the candlestick opens and closes with a gap.

Conditions required for the pattern to appear:

  1. A support or resistance level;
  2. The first candlestick has a long body of the same color that the current trend is – and small shadows.
  3. The second candlestick opens with a gap, has a small body and short shadows. It may be of the opposite color that the current trend is; in most cases, it has little significance anyway.
  4. The third candlestick opens with a gap and closes above the opening price. It must be of different color than the first candlestick.


Open a position after the third candlestick closes. Place a Stop Loss at the low of the pattern. If you are trading an instrument with a large spread and on a small timeframe, you may add the average spread to the low to compensate for the error.

You may place a Take Profit at the nearest resistance level or as 1:4 to the SL.

A Morning Star looks as follows:

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How does an Evening Star form?

An Evening Star appears at the highs of the price chart, and its structure is totally opposite to that of the Morning Star.

Conditions required for the pattern to appear:

  1. A support or resistance level
  2. The first candlestick is ascending; it has a long body of the same color that the current trend is.
  3. The second candlestick has a small body and opens with a gap. The color of the candlestick is irrelevant.
  4. The third candlestick also opens with a gap; its color is opposite to that of the first one, and the closing price is below the opening price.


Place an SL at the high of the pattern. As with the Morning Star, you may compensate for the error by placing the SL plus the average spread. The TP belongs to the nearest support level or is at 1:4 ratio with the SL.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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What Is Stock Split and How Does It Influence Stock Price?

Author: Victor Gryazin

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Dear Clients and Partners,

This article is devoted to such an idea as a split of stocks, its influence on the stock price and on how attractive they are for investors

What is a stock split

A stock split is an increase in the number of stocks of the issuer in circulation that entails a decrease in the stock price but not in the general capitalization. This is a wide-spread market practice, naturally supported by the company's desire to make their expensive shares more affordable to a wide range of investors.

Many actively developing companies are interested in an in-flow of extra money that new investors can bring. However, not every investor can afford promising and expensive stocks.

Hence, to make stocks cheaper and more affordable, the split procedure is run to. As a result, the number of stocks increases and their price drops proportionally. This makes the stocks more affordable to investors.

For example, if a company increases the number of its shares five times, i.e. carries out a split of 5:1, investors can have 4 extra shares per each they already have.

At the same time, the price of one share decreases proportionally: if initially a share cost $1,000, after the split it will cost $200. Hence, each shareholder of this issuer will have 5 times as many shares but their total price will not change.

Critical points of stock splits

The split coefficient that shows how much the number of stocks changes after the procedure, is normally anything between 2:1 and 10:1. In the split procedure, there are three main dates:

  • The day of announcement. To get started, the company makes a public announcement of its plans for a stock split and all the details that investors need to know. This information usually includes the split coefficient and the day when the split is to happen.
  • Register closing day: this is an important day when the list of the company's shareholders is settled. These people will get extra shares after the split.
  • The split day is the day when new stocks appear on the investors' broker accounts and start trading at the new price.


What is a reverse split?

There is another procedure known as the reverse split that also changes the number if stocks in portfolios. It is also called stock consolidation.

By this procedure, the stocks that investors hold are changed by a proportionally smaller number of stocks. For example, a reverse split of 1:3 makes every three shares into one. This means that if you used to hold 30 shares of the company, after a stock consolidation you will have only 10 but the price of each share will grow three times.

For example, if the stocks did horrible, trading low under a dollar, a reversed split can raise their price.

How does a split influence the stocks and investors?

On the whole, a stock split is interpreted as a good event for the issuing company, though it does not influence its capitalization directly. A split means that the company is developing, doing well, and the growth of its shares confirms it. Carrying out a split, the company signals that it wants to make its shares more attractive and affordable to private investors.

A decrease in the price makes the shares more affordable to investors and more liquid. The history of splits shows that the growth of stocks after a split usually exceeds the growth of major stock indices. Hence, after a split, the portfolio of an investor can have a significant profit, if the shares keep growing.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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RoboForex wins prestigious awards in the financial sector

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Dear Clients and Partners,

We’ve always tried to maintain the high level of the services we provide and introduce pioneer products. Our efforts were not for nothing – they were recognised with prestigious awards of the financial industry: "Best Investment Products (Global)" at Global Brands Magazine Awards, "Most Trusted Broker – Global" according to International Business Magazine Awards, "Best Multi-Asset Trading Platform (LatAm)" and "Best Prime Trading Account (Asia)" at Global Banking & Finance Awards.

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Counting these awards, the total number of titles received by RoboForex has reached 30. However, the most valuable and precious award for us is the trust of our clients and partners, who has been choosing our company for cooperation for 11 years now. We truly appreciate your trust and are very thankful for the choice you made.

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Sincerely,
RoboForex team

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How to Filter Stochastic Signals?

Author: Andrey Goilov

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Dear Clients and Partners,

We already have two articles about the Stochastic Oscillator describing in detail the indicator itself and the ways of trading by it. This is an oscillator, i.e. it demonstrates how much the price has fluctuated from the average; it works great in flats.

If there is a strong, directed trend, such an indicator will give a lot of reversal signals, making the trader buy in the falling market and sell in the growing one. Hence, traders do not normally use Stochastic by itself: instead, they add other signals to it, enhancing the work of the indicator significantly.

Today, I will try to step beyond the boundaries of normal trading by the instrument and show you how to filter its signals in order to make money on lengthy trends.

Some history

The necessity to track indices appeared as early as the 20th century. In 1925, at the International Conference of Labor Statisticians, certain rules of data collection, processing, generalizing, and presenting were adopted. The importance of such information was acknowledged by all the participants of the conference.

Also, at the Conference, a universal approach to planning and regulating price policies of countries was worked out. Practically, these were the first steps towards globalizing international markets.

The standards created that time were revised three times later: in 1947, 1962, and 1987. In 1962, at the tenth Conference, the term PPI was finally adopted. This is exactly the term used today.

Moving Average

I guess, the best way to improve signals from Stochastic is to add a Moving Average to it or several such lines. This combination lets the trader work by the current trend.

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For trading, an H4 or H1 chart of any currency pair will be good. Add an MA with period 75: if the price is above the line, we look for a signal to buy from Stochastic. If the price breaks through the MA downwards, the trader needs a signal to sell from Stochastic.

A signal to buy

Let us have a look at an example with EUR/JPY. We see the price go above the MA(75), indicating an uptrend. In this case, we are not interested in signals to sell, because the Stochastic values may stay above 80 for a long time and quite often perform crossings for sale. Such signals must be ignored.

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The best signal will be a decline of the Stochastic values below 20 and crossing of this area. In the marked area, there were two such signals, and both times the market kept growing.

A Stop Loss in such a case must be placed 35-55 points away from the MA. As for a Take Profit, place it at least at the local high because the trend is ascending, and the price will easily renew it.

However, if the price breaks through the MA downwards and the signal lines of Stochastic cross in favor of buying, wait for the price to get above the MA again and buy with the same risk of 35-55 points away from the MA.

Bottom line

The Stochastic Oscillator gives too frequent entry and exit signals by the crossings of its signal lines. To improve those signals, you can add other indicators, combine Stochastic with graphic patterns, or check for the confirmation of signals on different timeframes.

Adding a Moving Average to the chart alongside Stochastic will let you trade the trend only. If you add a graphic pattern, you will avoid preliminary signals from the pattern itself. Combining various TFs gives you an extra Stochastic signal from a smaller TF.

As you see, there are plenty of trading options with Stochastic. Just test them all on a demo account and always follow your money management rules, especially when you trade real money.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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How to Work with Sources of Information and Avoid Falling A Victim to Market Panic

Author: Vadim Kovalenko

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Dear Clients and Partners,

In the era of the Internet and electronic media when information is available to anyone, it’s become easier to fall a victim to a pre-planned information attack. In this article, I want to tell you how to avoid this “doom” when analysing financial news.

When you’re overcome with market panic, you can take wrong investment decisions, which will make you lose potential profit or, which is worse, suffer losses.

From time to time, news media misrepresents a real picture; however, even in these cases, one can eliminate the unlikeliest pessimistic or optimistic scenarios. To be able to do this, one has to be well informed about basic concepts of the nature and special aspects of provided publicly available economic information.

Where should we start?

At first, you have to understand: ordinary people don’t have and will never have an amount of data available to civil servants just because some part of this data is highly classified information. Therefore, one should rely only on public sources.

Economic data implies a set of indicators that display the national economy state or show any changes in all its components. When performing market analysis on one’s own, it is recommended to use only documentary information sources.

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Types and sources of information

There are a lot of economic data classifications but we’ll talk only about the most important ones. The data is divided into:

  • Forecasts: short-, mid-, and long-term.
  • Planned: can be found in the economic calendar.
  • Accounting: financial reports, national statistics.


If you’re a rookie in analysing economic indicators, it is recommended to stay away from ready analytical reviews because they are already distorted by the author’s subjective perception. It’s much better to work with primary data. Of course, in the very beginning, you may draw false conclusions but they will be your personal mistakes you’ll learn from. However, sometimes you should read opinions given by popular financial analysts to have a second opinion.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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How to Trade Linear Regression Indicator

Author: Andrey Goilov

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Dear Clients and Partners,

The Linear Regression Indicator was designed and presented by Gilbert Raff. It happened quite recently, in the 1990s. So, this instrument can be called a rather new one as long as the majority of indicators have been created in the 1970s.

The Linear Regression Indicator, or LRI, consists of three lines. These lines show the high, medium, and low of the current price movement, forming a price channel. The upper and lower borders of the channel demonstrate the extremes to which the price has deviated from the middle line.

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You can see that the indicator somewhat resembles the Bollinger Bands, which consists of a floating channel on the chart that is from time to time broken through by the price up or downwards, after which the price returns to the medium level.

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Regardless of the fancy name, the LRI is quite simple to use.

What is the essence of the LRI?

As I have already mentioned, the Linear Regression Indicator consists of three lines.

First, the middle line is drawn based on the price levels; it is also known as the trend regression line.

The indicator adds two lines to the first one at equal distances from it. Traders say those are quality support and resistance levels, between which the price will be going for some time.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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RoboForex wins the “Best Affiliate Programme (Global)” award

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Dear Clients and Partners,

In autumn 2021, RoboForex received the “Best Affiliate Programme (Global)” award at one of the world’s leading events in the sphere of Forex and finance, “Global Forex Awards 2021 – Retail”. RoboForex’s Affiliate program was highly appreciated by users and got the most votes.

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RoboForex would like to thank everyone who voted for their trust. Such results inspire us and give us a reason for further development and improvement. RoboForex strives to provide traders with the most favourable trading conditions, including the ones that attract new clients to the company. Now it’s time for you to assess them:

  • 50% of the company’s revenue.
  • No restrictions on deals and payouts.
  • Daily payouts to your account.

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Sincerely,
RoboForex team

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How to Trade “Tasuki Gap” Pattern?

Author: Victor Gryazin

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Dear Clients and Partners,

In this article, we’ll discuss the rules and methods of trading the “Tasuki Gap” pattern. You won’t find it very often, but it’s a quite strong pattern of trend continuation from the candlestick analysis.

How the “Tasuki Gap” pattern is formed

The “Tasuki Gap” candlestick pattern is formed during an ascending or descending tendency and predicts its further development. The pattern consists of three candlesticks: the first two have the same body colour with a price gap between them; the third candlestick has an opposite body colour and returns the price into the gap (between the first two candlesticks).

The first two candlesticks of the pattern show the trend direction and confirm its strength – the gap between them is evidence of that. The third candlestick, which is closed in the opposite direction, is a correction towards the previous movement. This candlestick shouldn’t eliminate the gap with its closing price – if it happens, trading the pattern is not recommended.

Bearish Tasuki Gap

“Upside Tasuki Gap” is formed during a descending tendency: bears dominate the market and believe that the decline will continue. The black bearish candlestick appears on the chart. Later, under the influence of active sales on the market, the next candlestick is opened with a gap to the downside and closed with a black body candlestick.

After that, the price is forming an ascending correction, during which a white bullish candlestick appears and makes the price return to the gap. This gap is now a resistance level. Here, bears start selling again and if bulls couldn’t close the session above the gap, then bears are very likely to resume the downtrend and update the local low.

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Recommendations for trading the “Tasuki Gap” pattern

When trading this pattern, one should pay attention to the following:

  • “Tasuki Gap” must be formed within an ascending or descending tendency, it’s better not to trade it inside a sideways channel (flat).
  • The pattern’s third candlestick mustn’t close the gap completely with its body. In this case, a trading signal is cancelled.
  • The pattern materialization probability increases in the combination with price patterns, support and resistance levels, signals of trading indicators.
  • It is recommended to use H4 of longer timeframes.


Closing thoughts

The “Tasuki Gap” candlestick pattern appears during an ascending or descending tendency (bullish or bearish respectively) and predicts its further development. Excellent addition to the pattern is technical analysis.

Before using the pattern in real trading, one should learn past statistics and historic records and practice on a demo account.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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How to Use the Current Ratio Multiplier for Stock Analysis

Author: Maks Artemov

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Dear Clients and Partners,

The Current Ratio multiplier (or Liquidity Ratio) shows a company's or corporation’s ability to pay short-term obligations due within one year. The multiplier is calculated as Current assets/Current liabilities for a particular period of time.

Current Ratio is used by investors, companies’ top management and analysts for both assessing investment attraction of an organization and practical understanding whether a company can satisfy its current debts and other payables.

When a company’s activities result in fewer funds on its balance sheet than required for the performance of financial obligations to creditors or suppliers, then the current liquidity implies the impossibility of debt compliance.

If the situation is reversed and a company has more money on its balance sheet than necessary for paying all its debts and liabilities, its profit significantly decreases because a company keeps the money on its accounts instead of realizing what is earned. In a perfect world, the current liquidity of a company should be balanced.

Calculating the Current Ratio multiplier

Like all other multipliers, Current Ratio for public companies can be found on the Internet, so there is no need to calculate it manually. All you have to do is specify a required value in the stock screener and get the results.

An example from a popular resource finviz.com:

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However, for illustrative purposes, let’s look at the Current Ratio calculation formula:

Current Ratio = Current assets / Current liabilities

  • Current assets are the funds involved in a company’s operations and activities that are liquidated during the year (12 months). An increase in assets ratio contributes to a company’s capital turnover. A sudden increase in operating assets may be caused by ineffective activities of a company and lead to, for example, a surplus of products at stock. According to another term, Current assets are just short-term assets because of their quick usage.
  • Current liabilities are a company’s total liabilities to be liquidated within 12 months using current assets only.


The result of this operation (Current assets / Current liabilities) is Current Ratio.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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RoboForex improves trading conditions and opportunities for its clients

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Dear Clients and Partners,

The company is constantly working on the optimization and the improvement of our products, so we’re pleased to inform you about the result of the work we have conducted:

  • Order execution is now faster.
  • Swaps are better.
  • Spreads are lower.


12 new cryptocurrencies are already available for trading

Also, RoboForex has expanded the list of trading assets by adding 12 popular digital currencies: Bitcoin Cash, Cardano, Chainlink, Cosmos, Dogecoin, Litecoin, Monero, Polkadot, Ripple, Solana, Stellar, TRON.

Our clients can now trade 16 cryptocurrency instruments with the best conditions:

  • 24/7 trading.
  • Leverage up to 1:50.
  • Deposits from $10.


New instruments are already available in MetaTrader 4, MetaTrader 5, and R StocksTrader. More detailed trading conditions for all types of accounts can be viewed on the "Contract specifications" page.

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We continue our systematic work on the company’s products from the perspective of our clients and try to provide them with the best trading conditions, a wide range of instruments, and consistently high quality of services.

Sincerely,
RoboForex team

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What are Forex Cent Accounts Needed For?

Author: Victor Gryazin

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Dear Clients and Partners,

In this article, we will review cent accounts and what they are needed for. Such accounts let beginners dive in real trading with minimal expenses and experienced traders – test their trading strategies or robots, as well as some psychological relief.

What is a cent account?

A cent account in Forex is a trading account provided by the broker; the balance is measured in the base currency (US Cent, EU Cent, etc.) denominated 100 times. Trading conditions on cent accounts are almost the same as on real ones. You only need to deposit it for 10 USD to get a 1,000 US Cent deposit.

The Cent account type is widely used for market beginners and those traders who practice or want to test a certain strategy in real market conditions with smallest expenses.

A cent account is always a transition point between a demo account and a classic one, the first step to real trading with a decreased risk. If, for example, a trader wants to work with a capital of 10,000 USD, they only need 100 USD to open a 10,000 US Cent account.

What are cent accounts used for?

Whether one needs a cent account or not, this is always for each trader to decide. One needs it for practicing for real with minimal risks, another – as an account for making unsystematic emotional trades. Let us focus on the main reasons for using cent accounts.

Test trading

This must be the most widespread reason for using cent accounts. Beginners practice their skills on demo accounts, but as long as money is virtual there, they do not include one of the main aspects of trading – the psychological one. Hence, for further development, they need to switch to a real account, and a cent one is a great choice. It allows getting real trading experience and check the working ability of their trading system with minimal expenses.

They can just keep in mind the capital that they plan to use in the market. For example, to check the abilities of a capital of 5,000 USD, they can open a cent account and deposit it for 50 USD to get a 5,000 US Cent capital. As a result, the trader can fully test their strategy on this deposit, risking 50 USD at worst. However, their profit will also be in cents, not in dollars.

In such cases, the trader’s task is not to make a large profit but to train their skills and develop psychological stability. After the trader makes sure their trading is stable (they get a positive result over a reporting period: quarter, semester, year), they may switch to a real trading account.

Psychological vent

Another reason for using cent accounts is making emotional trades that go counter your trading rules. For example, you see on the chart that after some important fundamental news there is a strong active movement. You are sure that a mighty impulse will follow but your trading system does not give any signals in this direction. You want to open a position but this is against your rules, right?

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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Company Makes a Spin-Off: What Does Investor Do?

Author: Maks Artemov

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Dear Clients and Partners,

The stock market is full of various events and phenomena, and one cannot always keep an eye on all of them. There are those that must be tracked anyway; you must know how to behave and what to do in certain circumstances.

One such event is called “spin-off”. This article is devoted to it, its influence on the shares of the company and on investors.

What is a spin-off?

Spin-off means that the company splits up, or a branch of its business separates in a separate structure. In other words, the main (parent) company opens a subsidiary and hands over a part of its assets and liabilities, opening a separate legal entity. The parent company, simultaneously, preserves it legal entity.

This event must not be mixed up with opening a new company at the expense of founders and investors.

An example of a spin-off

Let us take an imaginary business as an example.

Company SSS makes construction materials, gradually extending its product line. A bit later the company offers a whole assortment of such products and takes up its niche in the market.

In such circumstances, the management becomes more and more ambitious, craving for development, and decides to carry out a spin-off. Thus the management aims at taking up another niche, namely, construction and installation works.

SSS is a public company with shares in free turnover. At the general meeting of shareholders, they decide to create a subsidiary SSS-1 that will work in the new niche. They also decide upon allocating money for this and all organizational issues. This is quite a lengthy process that can take from six months to a year.

The conditionally new company acquires some assets and liabilities of the company, issues shares, and sets up its primary cost. As a result, all shareholders of the initial company acquire some new share.

This happens at the exchange rate, which is a ratio of the new shares to the share price of the parent company. This will depend on the decision made at the meeting of shareholders.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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MACD + ADX Trading Strategy

Author: Andrey Goilov

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Dear Clients and Partners,

The name of the article clearly indicates that the latter is devoted to a strategy that uses two indicators: ADX and the MACD oscillator. To be short, I will be calling it MACD+ADX. Some say that a trend indicator alongside an oscillator is the most efficient combo.

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The strategy is meant for day charts of currency pairs, which means less time spent on graphic analysis than with shorter timeframes. Any of these three pair suits the strategy: EUR/USD, GBP/USD, AUD/USD. Experienced investors stick to these ones because majors have more predictable behavior, and tech analysis works much better on them.

In the article I will show you how to combine signals from the two indicators correctly and will reveal some nuances and rules of work by the strategy..

MACD+ADX description

To open a position, start by analyzing the activity of ADX with period 16. Make sure you choose correct settings when adding the indicator to the trading terminal.

Signals in the strategy do not differ from "classic" ADX signals. As you know, the author claims that a crossing of +Di and -Di as it is already gives a market entry signal. For example, if +Di crosses -Di from below, this is a signal to buy, and if -Di crosses +Di from above, this signals to sell.

+Di and -Di show the difference between today's and yesterday's high and low. So in the first case, when +Di goes up, the trend must be ascending because today's highs are higher than yesterday's. Hence, buying is the best option in such circumstances. Meanwhile, when -Di values go down, we can conclude there is a bearish impulse and get prepared for selling.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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How to Trade EUR/GBP?

Author: Igor Sayadov

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Dear Clients and Partners,

There are eight currencies in the world, recommended by the International Monetary Fund (IMF) for storing gold reserves. They would be:

1. USD – US dollar
2. EUR – euro
3. GBP – Great Britain pound
4. AUD – Australian dollar
5. NZD – New Zealand dollar
6. CAD – Canadian dollar
7. CHF – Swiss franc
8. JPY – Japanese yen.

The pairs constituted by 7 main currencies against the US dollar are called majors: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/CAD, USD/JPY, USD/CHF.

All other pairs traded in Forex that do not include the USD are called cross-rates.

Majors make up for 70% of all daily turnover in Forex; cross-rates make up for the remaining 30%. While among majors, the most widely used is EUR/USD, among cross-rates, EUR/GBP is the most popular one.

This article is devoted to this currency pair, its history and peculiarities, and trading strategies that suit it.

Short history of EUR/GBP

The EUR/GBP pair appeared right after the European Union was formed because it was necessary to establish trade relations between the two largest economies in Europe. Britain entered the EU in 1998, keeping its own currency and credit and monetary policy.

In 2016, the country decided to exit the EU. Brexit, which used to be the main source of talks before the coronavirus, came into force in 2020. Naturally, such dramatic changes affected the cross-rate of EUR/GBP.

On MN, we can see an uptrend coming to an end in 2016 and a consolidation range form at this high until 2020. After Britain signed an agreement about its final exit from the EU, the quotations started a new wave of decline.

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What influences EUR/GBP quotations

EUR/GBP is neutral to the US economy and performs no stunts characteristic of other pairs when some important news in the USA emerge.

This pair mostly reacts to inflation data in the EU and Britain. Also, check the pair when the ECB and Bank of England change interest rates.

As a rule, cross-rates react to such events by long-term trends. So, before such news emerge, single out a consolidation area and wait for exiting these areas by the trend.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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What is Depth of Market and How Does It Work?

Author: Victor Gryazin

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Dear Clients and Partners,

What is DOM?

DOM (Depth of Market, a.k.a. Level 2, Order Book) is a list of current orders to sell and buy a certain trading instrument, presented as a handy table. It demonstrates prices that market players offer at the moment. DOM shows the actual balance of sellers and buyers and thus serves a handy instrument for traders and investors.

Stock market, in essence, is an auction in which sellers and buyers participate. For example, you want to buy 10 stocks at a price you set yourself. Your order gets into DOM, and if your price is close to the current market price, a seller will appear quite soon. However, if there are people in the market who want to buy the stocks at a higher price, you will need to wait until their orders are executed.

What does DOM look like?

Classic DOM is divided into two columns: in the left one prices and volumes of buyers (the number of lots) are presented; in the right one there are prices and volumes of sellers. The difference between the nearest orders to buy and sell is the current spread.

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The look of DOM depends on the trading terminal you use but general parameters are the same. Normally, orders to sell are at the top and orders to buy are at the bottom. DOM cannot accommodate for all orders placed by buyers and sellers real-time online. Hence, it shows online those orders that are the closest to the current market price.

They are what form the so-called DOM. For example, if DOM is 20*20, the table consists of 20 nearest buy prices and 20 nearest sell prices. This is quite a wide-spread look of DOM that brokers use. However, you can customize it in the trading terminal settings.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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RoboForex: upcoming changes to the trading schedule in view of Thanksgiving holiday in the US

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Dear Clients and Partners,

We are informing you that due to the Thanksgiving national holiday in the US, there will be some changes to the trading schedule*.

MetaTrader 4 / MetaTrader 5 platforms

Schedule for trading on CFDs on oil (WTI, Brent), Metals (XAUUSD, XAGUSD), CFDs on US indices (US500Cash, US30Cash, USTECHCash), and Japanese index JP225Cash

  • 25 November 2021 – trading stops at 7:40 PM, server time.
  • 26 November 2021 – trading stops at 8:00 PM, server time.


Schedule for trading on CFDs on US stocks

R StocksTrader platform

Schedule for trading on US stocks, CFDs on US stocks, US indices, and ETFs

  • 25 November 2021 – no trading.
  • 26 November 2021 – trading stops at 8:00 PM, server time.


Schedule for trading on Metals (XAUUSD, XAGUSD) and CFDs on Crude Oil (BRENT.oil, WTI.oil)

cTrader platform

Schedule for trading CFDs on Metals (XAUUSD, XAGUSD)

  • 25 November 2021 – trading stops at 7:40 PM, server time.
  • 26 November 2021 – trading stops at 8:00 PM, server time.


Please take note of the above trading schedule changes when planning your trading activity.

* - This schedule is for informational purposes only, and may be subject to further change.

Sincerely,
RoboForex team

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Merger and Acquisition: What Are the Types and How Shares React?

Author: Maks Artemov

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Dear Clients and Partners,

No doubt, each investor is interested what happens to the company they put their money in after it goes through a merger or acquisition. What to do, especially with the shares in your portfolio? Most importantly, what profit one will receive after such business events? This article attempts at answering these questions and giving some options of behavior in the case of merger or acquisition.

Company M&A

Merger is a process in which two or more companies take some economic actions to enlarge or expand their business. The abbreviation M&A stands for Mergers and Acquisitions. After the merger, a larger company appears in the market. The aim of the process is to make business more efficient, increase production powers, take over new markets, and create a full or partial monopoly.

Types of mergers

There are two main types of M&A:

  • Friendly M&A happen when two companies agree on mutually profitable conditions and act by the agreement.
  • Hostile M&A happen when the management of the acquired company does not agree with the unprofitable conditions of the merger but usually has no choice. A hostile merger becomes possible when the acquiring company owns over 30% of the company that is acquired. If the former holds the control package of stocks (over 50%), the latter has no chances to oppose the merger.


The influence of M&A on the quotations

Firstly, let us get to know what happens to the shares of merging companies. In most cases, the quotations of the acquired company grow. The reason is a profitable share exchange offer and other bonuses for investors and shareholders.

Normally, the shares of the acquiring company can drop. The reason is increased expenses at the start. After a successful merger and successful reshuffling, the shares recover and start growing.

In certain cases, it so happens that the shares of the companies on both sides start falling after the merger is announced. Usually this happens when investors do not think that the merger is reasonable and see no perspectives.

The opposite can also happen: the shares of both companies grow. This happens when the merger looks promising for all and investors see no bad sides of it.

Bottom line

M&A is a market trade that has both good and bad sides. To make the best of it you need to study and understand all the processes. A good way to do it is to study identical agreements in other companies. This does not guarantee you success yet might give an idea of what will happen and what are the stumbling rocks.

M&A is a complicated process that can take a long time, so be patient and try to avoid emotional decisions.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

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RoboForex: ticker changes following Facebook's company rebranding

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Dear Clients and Partners,

Facebook, Inc. (NASDAQ: FB) announced the change of its name to Meta Platforms, Inc. (“Meta” for short), as part of its company rebranding.

If you have open positions in FB or you plan to open positions, please take into consideration the changes that will take effect prior to the trading session start on 1 December 2021.

How will this change affect positions and orders?

Accounts on MetaTrader 4 / MetaTrader 5

  • The ticker of all open positions in CFDs on Facebook's shares will change from FB to MVRS as of 11:00 PM server time on 30 November 2021, prior to the trading session start on 1 December 2021.
  • The ticker of all open positions in Facebook's shares will change from FB.nq to MVRS.nq as of 11:00 PM server time on 30 November 2021, prior to the trading session start on 1 December 2021.


Accounts on R StocksTrader

If you are using Expert Advisors (EA), check their settings to make sure they are operating correctly after the ticker changes.

All other trading conditions remain the same. Please take the above ticker changes into consideration when planning your trading activity.

Sincerely,
RoboForex team

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