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[Vlad RF]

The RoboForex partners promotion with cash prizes worth $1,000,000 has started!

Dear Clients and Partners,​

From 1 June 2023, all RoboForex partners can take part in our grand promotion with cash prizes. For ten consecutive months, we will distribute Member Coupons to active partners who have received a commission of more than 500 USD.

600 cash prizes worth $1,000,000

More about the promotion

How to join

More about the RoboForex Partners programme

The higher your commission, the more chances to win!

During each month of the promotion, you can receive up to 31 Member Coupons, each of which increases your chances of winning a prize. The number of Coupons depends on the amount of your partner commission received during the month.


​

Sincerely,
The RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project will continue, as usual, with the following demo contests:

The 147th competition of "Demo Forex" is approaching the final stage.
The 419th competition of "Week with CFD" has just started.
The 553rd competition of "Trade Day" will start on 28.06.2023 at 12:00.
The 467th competition of "KingSize MT5" will start on 29.06.2023 at 20:00.

To participate in our competitions, all you need to do is to go through a simple registration procedure just once, and then any of the competitions you like will be available to you in just a couple of mouse clicks

We're looking forward to your joining in and wish you good luck!

Sincerely,
RoboForex Contest

 

[Vlad RF]

Basket Trading: Using Interrelations Between Trading Instruments

Author : Victor Gryazin

Dear Clients and Partners,​

In this overview, we will discuss such as trading method as “Basket Trading”. It helps to diversify risks and create a market-neutral trading strategy.

What is Basket Trading?

Basket Trading is a method of trading that uses not just one instrument but a whole bunch (“basket”) of them. For example, instead of trading a single currency, you focus on a set of currencies. Or, instead of trading stocks of one company, you trade a portfolio of several companies in a certain sector.

The most popular way of creating a basket (portfolio) of instruments is finding a group of underpriced instruments, counting on their subsequent growth. The instruments can be stocks, currency pairs, ETFs, etc. A bright example is the portfolio of legendary Warren Buffett: he invests in the most promising stocks.

Basket Trading presumes trading one or several baskets of interrelated instruments. The peculiarity of this method is that it helps to diversify risks and create a market-neutral portfolio that helps you make money regardless of the market conditions and a certain trend. Let us discuss some strategies of Basket Trading.

How to do Basket Trading?

There are two main strategies of Basket Trading: investment (trendy) and market-neutral (arbitrary).

Investment strategy

This is a trend strategy that uses a basket of instruments. It is good for various investment ideas and helps to diversify risks. Instead of investing in one asset, we proportionally divide our capital among several instruments. As a rule, such instruments are interrelated and have similar characteristics.

In the stock market, this means investing in several similar companies instead of just one. For example, you expect stocks in the healthcare sector to grow supported by the fight with the coronavirus. Instead of investing in just one famous company, it will be wiser to put your money in several companies in the sector. This will help to avoid corporate risks – the stocks of one company might get stuck due to some inner reasons while the rest are likely to live up to your expectations.

In the currency market, this means trading several currency pairs, not just one. For example, fundamental analysis tells you that the US dollar will be declining in the nearest future. Instead of selling the dollar in just one currency pair (say, with the euro), you can use a basket of several currencies. For example, EURUSD, GBPUSD, AUDUSD (and more) simultaneously. As a result, you decrease the risks of investing in just one currency pair.

Market-neutral strategy

This strategy suggests buying and selling several interrelated instruments at once. The idea of the strategy is to track the difference in the prices of correlating instruments and use deviations of the price from the average to open positions in opposite directions. The hope is that after the deviation, the price will go back to average, bringing you a profit.

In the stock market, you can sell the stocks of several companies that have already shown decent growth and simultaneously buy a corresponding number of the stocks of companies from the same sector that have just started to grow. You expect the stocks that have leaped up will stabilize or even correct a bit while those that are just at the start will catch up; thus you will take the aggregate profit when the price difference of these two baskets decreases.

In the currency market, this can be a basket of opposite positions in currency pairs. For example, if the pound has gone down significantly in pairs with other currencies but is expected to grow, you can buy GBPUSD and sell EURUSD and AUDUSD in proportions, corresponding to the price and volatility of the pairs. This makes the positions market-neutral towards the USD.

Advantages and drawbacks of Basket Trading

Like other trading methods, Basket Trading has its advantages and drawbacks.

Advantages

• Diversification of risks. When we use a basket of instruments, we become less dependent on the dynamics of each of them. If your forecasts are correct, “successful” stocks will pull in tow the “unlucky” ones.
• The use of market-neutral strategies based on the correlation of the assets you use – they are less sensitive to changes in market trends.
• It is suitable for a wide range of assets and markets (Forex, stock, commodities, etc.).

Drawbacks

• The method is complicated as you have to keep an eye on several instruments at once.
• Risk increases when something extraordinary happens in the market. Statistical laws and interrelations that worked for you before might cause losses when conditions change.
• You need to use some special software (scripts, expert advisors, indicators).

Read more at R Blog - RoboForex

Sincerely,
The RoboForex team

 

[Vlad RF]

Debt to Equity Ratio: What Do Debts Mean?

Author : Maks Artemov

Dear Clients and Partners,​

There are plenty of instruments for analysing companies, financial ratios among them. Today I am speaking about one of them — the Debt to Equity Ratio, or Debt/Equity.

It demonstrates the ratio of the capital that the company owns to the one it loans. Simply speaking, it is the debt of the company divided by its equity, just as the name goes. The multiplier helps to understand what comprised the assets of the company. In certain cases, D/E is also called financial leverage.

The ratio is useful for checking the current financial situation of the company, whether it will be able to develop in the future, and whether it will generate profit.

How to calculate Debt to Equity

The formula for D/E is as follows:

Debt to Equity Ratio = Liabilities / Assets

• Assets of a company are all the money it has.
• Liabilities are all the money is borrows (credits, loans, debts).
• Short-term liabilities are used for paying off cash gaps. They are to be paid off within a year which makes them "cost" more.
• Long-term liabilities are used for bringing to life large projects. They are to be paid off within several years which makes them "cost" less. In other words, accounting for inflation, the more time passes since the time when the money was borrowed till the moment it is to be returned, the less this debt costs.

Information about liabilities and assets can be found in the financial reports of the company in the Balance Sheet Liability section.

Note that not always the fact that the company has certain debts is negative for it. Loaned money facilitats restructuring, development, mastering new technology, and expanding the business. All this can potentially yield a profit. In short, even huge and successful corporations sometimes loan money for business development.

What D/E means

• When D/E is zero, the company does not use loaned money, only its own assets. This is not always a good sign. We can conclude that the management is cautious about finance and in the future the company might make less profit than it could. As a rule, such companies develop slowly, but enjoy market stability. Your invested money will bring a modest yet constant profit.
• Above zero: this means that the company does loan some money. With such D/E, companies can potentially increase their profits. However, you need to know what they spend the loaned money on. The company might be covering up older debts, getting deeper in financial trouble. Nonetheless, companies tend to use their loans wisely.
• Above one: the company loans more money than it has. If it does not have enough to pay off its debts, it might end up as a bankrupt.

Which D/E is optimum

The answer depends on the sector that the company works in. The conditionally optimum level is 0.5-0.7. This means that the company uses the financial leverage correctly and has some future. In exceptional cases, the optimum D/E is taken as 1.

Advantages and disadvantages of D/E

The advantages are:

• It helps to compare companies by the ratio of their own money and debts;
• It shows whether the company loans money rationally;
• It demonstrates the solvency of the company;
• It helps to assess the perspectives for the development of the company.

Drawbacks:

• It does not allow comparing companies from different sectors;
• It seriously differs for companies from the same sector but different countries;
• It needs fresh info about liabilities and assets that is normally published once in a quarter.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex: upcoming changes to the trading schedule in view of Independence Day

Dear Clients and Partners,​

We are informing you that changes will be made to the trading schedule due to Independence Day in the US.

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

MetaTrader 4 / MetaTrader 5 platforms

Schedule for trading on Metals (XAUUSD and XAGUSD), CFDs on US Indices (US30Cash, US500Cash, and USTECHCash), the Japanese index J225Cash, and CFDs on oil (Brent and WTI)

• 3 July 2023 – trading stops at 7:40 PM server time
• 4 July 2023 – trading stops at 7:40 PM server time
• 5 July 2023 – trading as usual

Schedule for trading on CFDs on US stocks and CFDs on US Futures

• 3 July 2023 – trading stops at 8:00 PM server time
• 4 July 2023 – no trading
• 5 July 2023 – trading as usual

R StocksTrader platform

Schedule for trading on US stocks and ETFs

• 3 July 2023 – trading stops at 8:00 PM server time
• 4 July 2023 – no trading
• 5 July 2023 – trading as usual

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

• 3 July 2023 – trading stops at 8:00 PM server time
• 4 July 2023 – no trading
• 5 July 2023 – trading as usual

Schedule for trading on CFDs on US indices (US500, US30, and NAS100) and the Japanese index JPY225

• 3 July 2023 – trading stops at 7:40 PM server time
• 4 July 2023 – trading stops at 7:40 PM server time
• 5 July 2023 – trading as usual

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

• 3 July 2023 – trading stops at 7:40 PM server time
• 4 July 2023 – trading stops at 7:40 PM server time
• 5 July 2023 – trading as usual

cTrader platform

Schedule for trading on Metals (XAUUSD and XAGUSD)

• 3 July 2023 – trading stops at 7:40 PM server time
• 4 July 2023 – trading stops at 7:40 PM server time
• 5 July 2023 - trading as usual (close Only)

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

Sincerely,
The RoboForex team

 

[RoboForex Contest]

Dear traders!

In the first week of July, the ContestFX project will offer you the following competitions:

The 148th competition of "Demo Forex" and the 420th competition of "Week with CFD" have just started.
The 554th competition of "Trade Day" will start on 05.07.2023 at 12:00.
The 468th competition of "KingSize MT5" will start on 06.07.2023 at 20:00.

We'd like to remind those who have never been on the list of winners that all our winners receive prize money in their real trading accounts, which they can use to trade in Forex instead of investing their own savings.

If you want to be one of them, join us!

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Trade Crude Oil? Full Guide for Beginner Traders

Author : Andrey Goilov

Dear Clients and Partners,​

There are several ways of trading oil; an individual trader may choose from futures, CFDs, and options. Whatever type of contract you choose, you will have to analyze the chart of your asset and only then open a position: a buying one if you expect the crude oil to grow or a selling one if you think it will decline.

In most cases, the traders who work in MetaTrader 4 stick to currency pairs, leaving behind crude oil or gold. However, these instruments are especially interesting because they are "technical"; moreover, oil charts tend to react better to various graphic patterns than currency charts.

In this article, we will talk about the peculiarities of trading oil so that everyone could understand what is this asset like and how to trade it.

WTI and Brent: what is the difference?

There are several types of oil coming from different oilfields and differing in the quality and other properties. Today, the standard of oil price is the crude oil named Brent; it is produced in the North Sea and sold in Asia and Europe. Futures for this crude oil type are most popular in the world.

WTI crude oil is produced in the USA, in West Texas and mostly sold in the Western Hemisphere. The Brent and WTI prices did not probably differ too much until 2011. Since then, the WTI price has become much higher due to expensive transportation; at the moment, the difference could reach $10 or more.

At present, the difference between the two prices amounts to $5. However, most contract with real supply is signed for the WTI brand - that is why the futures fell to -$40 at the moment when there was little demand. Another important difference is the fact that Brent is denser and contains more sulfur.

What factors influence the oil market?

If you crave for making money on oil, it is vital to know the factors that influence the oil market. They are as follows.

Demand and supply

There is a viewpoint that it is the demand data that forms market trends; however, quality data on oil consumption and shortage is scarce. There are just the statistics of OPEC and Baker and Hughes. Anyway, it is clear that when the world needs oil and increases production, the price also goes up. In the current situation of the world pandemics and a decrease in production and consumption all over the world, oil prices fall. As soon as the market gets back to normal, the prices will be able to start quality growth thanks to an increase in demand.

Quotas for crude oil production from OPEC

Thanks to the decline in crude oil production by the agreements signed at OPEC meetings, oil prices grow. The aim of the organization is exactly keeping the prices stable. As you know, when Saudi Arabia and Russia failed to agree at one of the meetings, oil prices slumped. This was the market reaction to the price war between the two countries and their unwillingness to reduce production. However, the countries came to an agreement later, so there is a chance for a bullish trend in the market.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

Mentoring in Trading: Why People Do It, and How to Choose a Tutor?

Author : Vadim Kovalenko

Dear Clients and Partners,​

Mentoring has become quite popular these years. In the center of this movement we can encounter experts that for some fee help other people make a career, develop skills, and avoid typical mistakes in certain branches of knowledge.

The advantage of this method of education is that the student can get knowledge filled with practical skills. In trading, these services are also popular. With it, some managers started off as experts and even opened schools of trading and investments.

However, beginners are wondering how to choose a mentor. People take different ways of doing it: some find a mentor at once, some start off with self-education. In the latter case, fees are charged by the market in the form of losses that traders experience for mistakes. This article is devoted to the details of mentoring in trading: why experts for it and how a beginner should choose a tutor.

Why should an experienced trader teach someone

When a beginner starts looking for a mentor, they encounter ads of many traders who, in their turn, demonstrate impressive results and sums with many zeros. A question appears: why do they need to teach someone else and take more eyes for this? To my mind, there are several reasons:

1. New source of income
If a trader charges fees for learning, this means they want a compensation for their time and effort they could spend on trading. Hence, such lessons cannot be cheap. Moreover, this way managers can make money on attracting people — their students — to partnership programs of brokers. This is how traders make money on their trading. Most often, students become investors and increase the capital of their manager.

2. Vanity
Human qualities are also their in traders, and many of them crave for social recognition. They enjoy happy feedback from former students. Some managers just enjoy the process of teaching.

3. Enthusiasm
There are categories of people who are eager to be useful for the society. Such experts are few, but enthusiasm can also drive people into mentoring

I will single out special cases when people cannot trade successfully for psychological reasons. Excitement, lack of mental balance, emotional unstability are the reasons for negative trading history. Howevee, they have pedagogical experience, experience, and knowledge. On the other hand, such traders are hard to distinguish from frauds that seek likes and subscribers in social networks.

How to choose a mentor?

Understanding the motives that drive traders into teaching, let us find out how to choose a good mentor.

Firstly, make up your mind about your goals. Do you need to learn the basics or make your trading better? In the first case, when you need the basics, there is no reason for seeking help of an experienced trader. On the Net, there are plenty of free materials that can help you find your way through the main notions and categories. Then you can practice on a demo account, then switch to a cent account, and then decide on your trading style depending on your character. Thus you will get some experience, positive or not.

Choosing a mentor, check for not only their results but also the type of their trading system. If you are psychologically uncomfortable with scalping, there is no reason for learning from a scalper as you will have no result.

Price and length of learning

The price of your learning will depend on the expertize of your trader. I advise you against courses cheaper than 150 USD for group learning. As I wrote above, the manager will try to compensate for the time they spent on the students. Moreover, the price will be influenced by the number of successful students and the profitability of their trading.

As for the length of learning, you will need no less than 3 months. Get ready for the way to be long. Optimum length is 6 months.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, a RoboForex project called ContestFX is waiting for you with the following demo competitions:

The 148th competition of "Demo Forex" is gaining momentum.
The 421st competition of "Week with CFD" has just started.
The 555th competition of "Trade Day" will start on 12.07.2023 at 12:00.
The 469th competition of "KingSize MT5" will start on 13.07.2023 at 20:00.

If you haven't participated in our contests, trust us, there is nothing easier: go through a simple registration procedure on our website just once and get access to any of the competitions you like in just a couple of mouse clicks.

We wish good luck to all of you!

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Trade USD/CNH

Author : Victor Gryazin

Dear Clients and Partners,​

The US dollar against the Chinese yuan is quite a specific currency pair in Forex. This article is devoted to its trading peculiarities and formation of its exchange rate.

Some info about China and yuan

People’s Republic of China is an Eastern Asian country, number three in the world in terms of area and number one in terms of population. Since 1949, the country has been ruled by the Communist party of China.

The Chinese economy is based on both planned distribution economy and market economy alongside numerous foreign investments. Today China is the country with the second-largest GDP after the US. Many experts expect it to become number one quite soon.

China is the largest manufacturer and exporter of various goods. Thanks to a wide spectrum of economic connections, the Chinese yuan is quite a demanded currency. It is necessary for economic operations with the country. It is included in the special drawing rights basket of the IMF, which makes it a reserve currency.

Inside the country, the yuan is called “people’s money”. The monetary policy is carried out by the Central bank of the country, People’s Bank of China. All changes of the official exchange rate of the yuan are tracked and regulated by the Bank and only partially depend on market conditions.

Before 2005, the exchange of the yuan used to be strictly bound to the US dollar rate: 1 USD = 8.27 CNH. Now the rate is bound to a special currency basket comprised of currencies of 13 countries. The yuan is traded in Forex but its fluctuations are limited by 2% of the exchange rate set by the Chinese Central bank. Since 2010, the USD has been fluctuating between 6 and 7 CNH .

USD/CNH peculiarities

The peculiarity of the yuan is that it has two parallel exchange rates: its official domestic rate (USD/CNY) and international one (USD/CNH). The rate with the ticker CNH was introduced by the Central bank of China and the government of Hong Kong to attract international investors. The official yuan rate (CNY) is firmly regulated by the government and meant only for use inside the country.

People’s bank of China publishes the official exchange rate (Central Parity Rate) every day. This is the ratio of the yuan and the currency basket. USD/CNY and USD/CNH fluctuations cannot exceed 2% of it. When the border of the range is reached, the Central Banks intervenes, regulating further movements of the currency.

Trading characteristics of USD/CNH

• Trading time. The pair trades 24 hours a day except weekend, with the main activity during the Asian and American sessions.
• Volatility. Volatility is high, about 150-200 points a day. However, the range is limited by the Chinese CB.
• Spread. The spread is moderate as this pair is not the most volatile one in Forex. On popular ECN accounts, spread is normally about 3-4 points.

How to trade USD/CNH by fundamental analysis

Firstly, the trader should keep an eye on the monetary policy of the Chinese regulator: this is the key factor that forms the exchange rate.

Thanks to the robust growth demonstrated by the Chinese economy, the yuan has all the chances to grow against the dollar. According to economists, it is now seriously undervalued. China holds back the rate because it is highly oriented on export: it is more profitable for the country to have a low exchange rate of its national currency than to stimulate demand for its goods.

Hence, the Chinese CB prevents the national currency from growing too much. The current range is between 6 and 7 CNH per 1 USD, so take these levels as the landmarks for long-term trading.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

How to Trade USD/ZAR

Author : Andrey Goilov

Dear Clients and Partners,​

USD/ZAR — US dollar vs South African rand — is quite an exotic currency pair, not really popular among traders. Trading this asset has certain peculiarities and internal laws.

Some say that, compared to other pairs, this one is less liquid. However, on the D1 of USD/ZAR one could see a lengthy uptrend from the end of 2011 till the beginning of 2016. That time the quotations rose from 6.40 to 17.97, then declined several times in the form of corrections, and then started growing again.

At the very first glance you can see that USD/ZAR is capable of strong movements. And not only ascending ones that prevail but also lengthy declines. Do you want to know right now how to trade this currency pair, making use of all its characteristics? Let me tell you.

Trading characteristics of the currency pair

The pair reflects the relation of the US dollar to the South African rand. When I was preparing this article, you could buy a bit more than 15 ZAR for 1 USD. The growth of the pair means that the dollar is becoming stronger, and falling means that the rand is growing.

Trading characteristics:

• Trading time. The pair trades 24 hours a day on weekdays. Volatile movements take place during the European session.
• Volatility. Assessed by the ATR, it reaches 230 points a day on average. Minimal ATR levels were reached in the middle of 2021 and maximal — in July 2020. The difference is quite noticeable — the low was 180 points and the high was 380 points, all these during one year.
• Spread. It is quite low, reaching about 0.8 points at the calm market.

How to trade USD/ZAR

The currency pair can be traded by indicators, levels, and graphic patterns.

Trading by indicators

The pair is trendy, so a combination of Moving Averages will yield good results. You can choose tactics from the article “Top-7 Forex Trading Strategies in 2022” If you want something unique, add to the chart an EMA (95) and Bollinger Bands. Use an H4 chart.

Buying rules

• The price has secured above EMA (95) – this indicates a bullish trend.
• The price tests the lower border of the Bollinger Bands indicator that shows the lows.
• Place a Take Profit at the upper border of Bollinger Bands.
• The Stop Loss will be two times smaller than the TP.

Selling rules

• The price has secured below EMA (95) – this indicates a bearish trend.
• The price tests the upper border of the Bollinger Bands indicator that shows the highs.
• Place a Take Profit at the lower border of Bollinger Bands.
• The Stop Loss will be two times smaller than the TP.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project will continue with the following competitions:

The 148th competition of "Demo Forex" entered its third week.
The 422nd competition of "Week with CFD" has kicked off today.
The 556th competition of "Trade Day" will start on 19.07.2023 at 12:00.
The 470th competition of "KingSize MT5" will start on 20.07.2023 at 20:00.

We would like to remind you that our winners receive prize funds to their real accounts, and they can use those funds for trading in the Forex market instead of investing their own savings.

Good luck to all traders!

Sincerely,
RoboForex Contest

 

[Vlad RF]

Gold Price Forecast for 2023: Analyzing the Potential for Continued Growth

Author : Andrey Goilov

Dear Clients and Partners,​

As at the time of writing, the price of gold dropped by more than 8% from its all-time high of 2,081 USD per troy ounce, which was recorded on 4 May 2023. However, investors are not losing interest in the precious metal. In addition, record purchases by central banks over the past year give hope for a further potential rise in the asset price.

Today we will talk about the current price of gold, how prices have changed in the past and what values they can reach over the next few years. We will examine the main factors affecting the fluctuations in the gold price, specify drivers of possible growth of its quotes, and carry out a technical analysis of the price chart.

How did gold prices change earlier?

Gold was discovered by the ancient Egyptians over 4,000 years ago. They used it to create jewellery and religious items. For the Romans, gold was a symbol of status and power, and it was used to decorate crowns and statues. In the Middle Ages, gold coins were the main means of trade and international exchange. In later periods of history, this metal became the basis of the monetary system.

During the period of the gold standard, since 1887, the US government fixed the gold price at 20.67 USD per troy ounce. Following the abandonment of the gold standard and dollar devaluation in 1933, the cost of the ounce increased to 35 USD and remained at this level until 1967.

In 1971, US President Richard Nixon finally abolished the gold backing of the US currency, which resulted in a significant increase in the value of the precious metal. In the early 1980s, the price reached a record level of 850 USD per troy ounce, but over the next nearly 20 years, it was steadily going down.

Gold started to rise in price in 2001 amid financial crises, geopolitical tensions, and market uncertainty, with the quotes hitting a new all-time high of 1,920 USD in 2011. From 2012 to 2016 inclusive, the quotes went down to 1,000 USD. Since mid-2018, the prices resumed their upward movement and reached the level of 2,075 USD in 2020, hitting a new record high of 2,081 USD in 2023.

Why invest in gold

• Hedge against inflation. The reserves of this resource and its mining are limited, and therefore its value grows during periods of high inflation when fiat currencies are rapidly depreciating
• Reserve asset. During periods of instability, financial and geopolitical turmoil, investors invest in gold to protect their investments from risks and maintain stability
• Portfolio diversification. Adding gold onto a portfolio reduces the overall risk level for the investment portfolio, as gold prices are characterised by a low correlation with the value of stocks, bonds, and other assets. Conditions are being created to mitigate portfolio volatility

The main drivers of gold prices in 2023

Central bank purchases

According to the World Gold Council (WGC), demand for gold from central banks hit an all-time high in 2022, amounting to 1136 tonnes. This is the highest reading over the entire history of monitoring since 1950. Already in the first quarter of 2023, the demand from central banks reached a level of 228 tonnes, which is 176% higher than in the first quarter of the previous year.

According to the data obtained, experts expect an upward trend in demand to persist throughout the year. The WGC survey showed that 24% of central banks are ready to increase their gold reserves in the near future, which can lead to a rise in gold prices.

Jewellery demand

According to the WGC, the fourth quarter of 2022 saw heavy demand for gold jewellery – over 630 tonnes. In the first quarter of 2023, the demand increased by 1% to 448 tonnes compared to the Q1 2022 statistics.

Despite the overall aggravation of the global economic environment, jewellery production and consumption remain at a high level, with the demand over the past ten years ranging between 840 and 2,100 tonnes a year.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

How to Use EIA Oil Report in Trading

Author : Victor Gryazin

Dear Clients and Partners,​

This overview is devoted to the weekly EIA report about the situation in the oil market that influences the quotations of black gold quite a lot. Many traders keep a close eye on this publication and use the information in trading.

What is the EIA report

Energy Information Administration (that EIA stands for) is a department of the US Ministry of Energy created in 1977. It is responsible for objective collection of energy data, analysis, and economic forecasts. The department regularly publishes various reports on the topics around energy. Among them, there are reports on energy carriers reserves, demand for them, and prices.

The United States are not only the largest consumer of oil (consuming about 20% of global oil) but also the leading oil producer. The supply and demand balance in the USA gives a rough idea of the oil market on the whole. Traders, investors, and other market participants follow attentively oil statistics from the USA. Publication of these data is quite often followed by serious market volatility.

One of the most popular EIA reports is the weekly report on the state of the oil market called This Week In Petroleum. This report is published every Wednesday and contains comments on changes in oil reserves, demand, and other parameters of crude oil and oil products. If there are some unexpected major changes about crude oil and petroleum in the report, the market might react dramatically.

Which info is there in the report?

Investors and oil traders study the EIA report very carefully to use the data for forecasting the behaviour of prices for energy carriers. Analysts from energy companies also use the report to collect data that help them develop long-term business strategies.

The information published in the EIA report:

• Domestic Production: production level of the previous week in the US. This is prelim estimation that can be mended later.
• Percent Operable Utilization: if refineries work at their most, this might indicate increased demand for oil products.
• Crude Oil Inventories: this is the most important part of the report that represents the changes in oil reserves in the US.
• Total Motor Gasoline Stocks: obviously, this represents changes in gasoline stocks. This parameter is seasonal: in summer, demand for gasoline grows, which might be reflected in a decrease in the stocks.
• Distillate Fuel Oil Stocks: represents changes in the stocks of crude oil products.
• Crude Oil Import: represents – obviously – changes in the import of oil in the US. An increase in the import can sometimes lead to the growth of oil inventories.
• Crude Oil Export: represents the dynamics of oil export from the US. This parameter has been growing since a couple of years ago.

The key parameter is Crude Oil Inventories. If the report represents a higher parameter than had been expected, this means the demand is weak, and oil quotations become stressed out. A decrease in oil inventories means that the demand has got higher than the supply and helps oil prices grow. Crude Oil Inventories in the US are published weekly on the Economic Calendar.

How to use the report in trading

Oil quotations are influenced by a whole bunch of data, including the EIA report. And as long as the report influences the quotations, investors and traders use it in their work. Investors prefer long-term strategies and traders – short-term ones.

Long-term trading

For planning long-term trading which means holding an open position for weeks or months, traders analyse the reports over a certain period.

For example, they can check for a downtrend or uptrend in oil inventories over several weeks or serious deviations from the average over several years.

Though weekly EIA reports provide data important for understanding oil supply and demand balance in the US, investors also have to be attentive to the international situation.

Short-term trading

Trading strategies used for short-term trading on changes in oil reserves in the US have little differences to the general principles of trading news. When the data is published, short-term momentum movements of the quotations emerge, and they can be used for trading.

The direction of trading is chosen based on the current market situation, the technical picture, and data published in the report. Use tech analysis to detect the trend and draw the nearest support and resistance levels.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, a RoboForex project called ContestFX offers you the following exciting competitions:

The 148th competition of "Demo FOrex" has crossed its "Equator".
The 423rd competition of "Week with CFD" has just started.
The 557th competition of "Trade Day" will start on 26.07.2023 at 12:00.
The 471st competition of "KingSize MT5" will start on 27.07.2023 at 20:00.

To take part in our demo contests, all you need to do is to go through a short registration procedure just once, and then any of the competitions you like will be available to you in just a couple of mouse clicks.

Join us, it won't be boring!

Sincerely,
RoboForex Contest

 

[Vlad RF]

What is Market Sentiment in Forex, and How It is Used in Trading

Author : Victor Gryazin

Dear Clients and Partners,​

In this overview, I will get you acquainted with such a notion as market sentiment in Forex. It helps confirm the current trend and warns you of its probable end.

What is market sentiment?

The market sentiment means the prevailing mood of most market participants at a certain moment. The word “sentiment” is of French origin and means “feeling, mood”. Market sentiment shows what market participants are currently keen on – buying a financial instrument (a group of assets) or selling it.

In other words, market sentiment is the current balance of traders’, investors’, and other market players’ optimism and pessimism about a certain financial market or asset. This is some sort of collective emotion based on certain expectations. The expectations are formed, as a rule, by the news and various fundamental factors.

For example, if market participants are sure that the stock market will be growing, they start buying shares actively and thus support the bullish trend. On the contrary, if most players are sure that the stock price will be falling, and a bearish trend will appear – they will start selling assets that they expect to decline soon. As a result, market supply will become excessive, making the price drop.

Forex market sentiment shows what most market participants prefer to do now: buy or sell currencies. Traders use such expressions as “buy bucks” - this means traders are ready to buy the USD against other currencies, or “sell bucks” - which means traders are ready to sell the USD against other currencies.

Market sentiment and expectations are influenced by several factors. Factors that support the currency rate form positive sentiment (moods to buy). Factors that drive the currency down form negative market sentiment (moods to sell). Check below the factors that influence Forex market sentiment.

What factors influence Forex market sentiment?

Market sentiment is mostly influenced by so-called fundamental factors. They include various financial, economic, and political events that influence directly currency rates. Such factors are studied by fundamental analysis. Here are the most important of such factors:

• Monetary policy of Central banks: cycles of increasing and decreasing the main interest rate can form long-term uptrends and downtrends in the national currency. If market players expect the rate to grow, the market sentiment will be bullish: market players will be ready to buy. If a decrease in the interest rate is expected, things go vice versa.
• Economic factors: if the news about the country’s economy is positive (GDP, employment, production, etc.), market sentiment about the currency improves.
• Political factors: elections, government resignations, scandals, sanctions, etc. can form negative market sentiment towards a currency.
• Rumors and expectations: they include political and economic factors but in the form of rumors and expectations.
• Force majeure: natural disasters, man-made disasters, terror acts, epidemics. All this can form serious negative sentiment towards a currency.

The influence of fundamental factors on Forex market sentiment can be short-term (several minutes to several days) or long-term (several weeks, months, years). For example, information about the growth of unemployment last month can have a short-term negative effect on market sentiment, while an announcement of the CB head about the necessity to increase interest rates can form a long-term positive sentiment to a currency.

Indicators for assessing Forex market sentiment

To detect the current market sentiment, various indicators can be used. They try to evaluate market sentiment and express it in digits or graphically. By them, one can conclude on the current positions and opinions of traders and how they can influence price moves.
Here are three popular indicators for assessing Forex sentiment.

DXY

The DXY (US dollar index) is the main index that shows the current market sentiment towards the leading world’s currency. The direction in which the index goes (the current trend) reflects the actual market balance. The growth of the index means positive market sentiment and the growth of the USD against major currencies, while the decline of the index means negative sentiment and weakening of the major currency.

The DXY is traded in exchanges as futures and options. By tech analysis, you can analyze the chart of the index and detect the current sentiment towards the USD: positive, negative, or neutral. You can find the DXY chart on various informational resources such as tradingview.com.

COT reports on currency futures

A COT (Commitments of Traders) report is a weekly publication showing aggregate positions of various players of futures markets. The COT is published every Friday by the US CFTC. Though this data refers to futures, they correlate strongly with the Forex market.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex adds additional MT4 trading servers for its clients

Dear Clients and Partners,​

RoboForex launched three new dedicated servers (RoboForex-Pro-5, RoboForex-ECN-3, and RoboForex-ProCent-8) for the MetaTrader 4 platform. This improvement will help to enhance the stability and performance of our trading servers.

The new servers are available for clients with Pro, ECN, and Cent Affiliate account types.

Pro

The most popular account type at RoboForex with optimal trading conditions for traders with different experience levels.

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ECN

An account type for experienced traders which combines the tightest spreads, high execution speed, and competitive trading conditions.

• Tight spreads - from 0 pips
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Cent Affiliate is a special type of account which is suitable for partners who provide their clients with certain services. More information is available here.

Open an account
and start trading with competitive conditions


Full details of accounts >​

Sincerely,
The RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project will continue with the following demo competitions:

The 148th competition of "Demo Forex" is coming to its end.
The 424th competition of "Week with CFD" has just kicked off.
The 558th competition of "Trade Day" will start on 02.08.2023 at 12:00.
The 472nd competition of "KingSize MT5" will start on 03.08.2023 at 20:00.

All winners of our contests receive prize funds to their real trading accounts, and they can use those funds for trading in the Forex market instead of investing their own savings.

Don't miss your chance to be one of the winners!

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Make Money on Stocks Decline?

Author : Andrey Goilov

Dear Clients and Partners,​

It is widely thought that any trader can make money on the growing market but if the market is falling, only a few can make use of it. Indeed, falling of the stock price of large companies is interpreted as a good opportunity to buy the stocks and earn money later, on their increase.

At the beginning of 2019, one Apple stock cost about $142 but by the end of the year, it has reached $169. As we can see, even buys on a falling market can yield a good profit in a year or less.

However, if the trader wants to take everything from the market and make money on the falling of stock prices as well, it is worth figuring out how and at what risk we can do so: if we buy, we do not care how much the price grows, be it 100% or 200%; but if we sell, our potential loss may be substantial if the company grows well.

How to sell stocks?

Of course, a question emerges: how do we sell what we do not own? Here, the broker company comes to the scene, helping the trader make such operations. By the way, we have a nice article with guidelines for choosing a broker.

The idea is that you loan a certain number of stocks from the broker. Then you sell them at the current market price; thus your debt to the broker appears. This is the first part of the operation: opening the position.

To complete the operation, we need to give back the loaned stocks to the broker, buying them at the market price. To make money, you need this price to be lower than the initial one. This is the second part of the transaction — closing the position.

In October 2018, the Apple stocks were testing $230 per stock and then fell to $142. Let us see how we can calculate the profit on this falling.

Imagine we have forecast this decline and realize that we can earn $85 on one stock. We decide to open a position selling 25 Apple stocks at $230, the aggregate sum being $5,750. To close the position, we need to give back to the broker 25 stocks but at the price of $145. In other words, instead of $5,750, we give back $3,625. Our profit may be $2,125. We should remember that this is a historical example that represents the idea, real trading requires a risk assessment.

Why does the broker give this opportunity?

For such a specific service as loaning stocks to a physical person, the broker charges a certain fee. The price is normally represented in the trading conditions: normally, it is a commission fee for opening and closing the position. Thus, the broker will make money on loaning the stocks, while the trader will have an opportunity to make money on the expected decline.

Will I have dividends for such a transaction?

Experienced traders do not recommend to sell stocks before the payment of dividends. The thing is that loaned stocks will not bring dividends: they will be received by the real owner holding a long position on them. The trader who sells the stocks pays dividends to the owner.

It turns out that we cannot count on additional income in the form of dividends during such an operation, we make money only in the case of a serious falling.

Is there any risk?

Of course, speculative trading always involves risks. It is thought that the risk of a loss on a short position is always much higher than when buying stocks.

If we have bought a stock at $5 per stock, when the price falls to 0, we only lose $5. If we sell a stock at $5, the price may grow not only to $10 but to $50, to $100 or higher. In this case, we may lose much more than just $5.

Here, the risk is, indeed, high at the moment of opening a selling position. However, as with Apple, fallings happen, and we can make money on them, and risk management is an important part of trading.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

Drawdown: What is It and How to Escape It?

Author : Dmitriy Gurkovskiy

Dear Clients and Partners,​

Such sonorous terms as Margin Call and Stop Out must be known to anyone who deals with trading. Each person has come to know it in their way: some got acquainted with them practically, forcefully closing their losing positions, some - theoretically, studying the basics of trading.

If you have not heard these terms yet, a short lecture will, perhaps, make you think well about the consequences of unreasonable and excessively emotional trading.

Margin Call is a notification from your broker, in which they require to additionally replenish your security deposit.

If after a Margin call the trader does not deposit heir account, and the losses keep growing, then after the price reaches a certain level, the Stop Out procedure will be launched. This means the broker will close some or all open positions on the account. However, Margin Call and Stop Out are not as disastrous as the trader's actions that lead to them.

One such action might be connected to unthoughtful trading operations based on no strategy or tactics, without risk and money management. An example of such actions can be trading the whole capital both in periods of high volatility and a calm market. In such times, the trader is more of a gambler, hoping for a quick gain.

What is a drawdown?

A drawdown is a decrease in the balance and equity on the trading account; to put it simpler, a drawdown is a loss. Drawdowns can be of two types: floating and fixed.

Floating and fixed drawdown

Floating drawdown is an aggregate loss of all open positions. Here, we highlight that the trades we are talking about are still open.

For example, the trader opened a position, and then the market situation started developing counter the forecasts, so the trade yielded a loss. This loss will constitute the floating drawdown.

Also, such a drawdown is called floating or temporary because a day or two later the situation might change either for better or for worse.

Reasons for drawdowns

I will keep repeating that bad trading can be explained by the wrong choice of a strategy and a lack of risk management and money management. However, even if the trader has all these elements of trading, they might be betrayed by their psychology and/or personal discipline.

The mistakes will be revealed by increases in the trading volume, unreasonable and chaotic buying and selling, locking and using the Martingale. Of course, all this might work, but it will not be systematic.

If you have drawdowns too often, you should think something like: "Am I trading the right way?". I mean, you can plan your profit and losses if your trading system is in harmony with the market and your money management helps you escape drawdowns quickly and accumulate profit.

If your trading account does get in a drawdown, first and foremost, you have to accept it. Any trader has got a drawdown sometime, and its presence on the account is virtually normal, the question is in its size.

How to escape a drawdown?

So, we are now nearing the part which is the reason for you to have started reading this. Again, a drawdown of an account is a natural situation you will hardly avoid. However, it can always be optimized, and its influence on the account - minimized. All this is rather easy to do: you need to follow the rules of money and risk management and your strategy. For most people, my words will seem banal. This is because not all readers have a strict financial plan, a trading strategy, risk and money management systems. So, the first step out of the drawdown will be adding the aforementioned to your trading.

There is a law: the deeper the drawdown, the longer it will take you to get out of it. If the trader was unlucky to lose 50% of the deposit in 2-3 trades, it is unlikely they will restore the capital in an equally short time.

On the Internet, you can find lots of information counter averaging, locking, and using the Martingale; however, advocates of these methods are also there. Not wishing to start an argument, I will say that both averaging and locking may do the trader lots of good if they know the tricks.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team