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  • Three Indicators Trading Strategy: Detailed Description

    Author: Andrey Goilov

    Today we're going to talk about the Three Indicators strategy. It's based on the use of tools such as the Accelerator Oscillator, the Awesome Oscillator, and the Parabolic SAR.

    The idea is to try to catch the beginning of an impulse, and earn money on this movement. Trading is done only on the major currency pairs, and on an hourly timeframe.

    We will show you how to combine signals from the three indicators, in an attempt to catch the beginning of an impulse long before it forms a reversal on the price chart. We will study the intricacies of this procedure, and detail the rules for opening and closing positions.

    https://blog.roboforex.com/wp-content/uploads/2022/10/Pic-1.png

    How to set up the three indicators

    The processing of signals according to the "Three Indicators" strategy could take hours or days. It all depends on the size of the potential profit: the bigger it is, the higher the risk and the longer the waiting time.

    Now let's talk about the indicators:

    1. The Awesome Oscillator is used with standard parameters. Traders note its similarity to the MACD indicator: it shows the difference between simple moving averages with periods of 34 and 5. It is represented by a histogram that changes colour when moving averages are crossed, with green indicating an uptrend, and red a downtrend.

    2. The Accelerator Oscillator is also added with the standard parameters. It is calculated taking into account the values of the Awesome Oscillator and displays the acceleration and deceleration of the driving force. In most cases, traders trade in the direction of the histogram: if its colour is red – you should not buy, if it is green – do not consider selling.

    3. The Parabolic SAR represents points that are above or below the price. The trend is said to be upward as long as the dots are below the price chart. If the price breaks through the indicator and a point appears above, then the trend changes downward, which means you should sell. Often traders use the Parabolic SAR to place a floating Stop Loss: if the indicator point is broken by the price, this means the market is changing direction, and the trade should be closed.

    An example of buying with the Three Indicators strategy

    Consider the situation on the EUR/USD chart on 3 October 2022. On a large bullish candlestick, the Parabolic SAR has positioned a point below the indicator chart. The Awesome Oscillator and Accelerator Oscillator histogram bars immediately became green on two indicators, so we mark the candlestick as the "signal".

    https://blog.roboforex.com/wp-content/uploads/2022/10/Pic-11.png

    We open the trade at the opening of the next candlestick at 18:00 at 0.9813. We set the Stop Loss below the level of the "signal" candlestick at the price of 0.9756. Take Profit is equal to the Stop Loss size of 57 points, and set at 0.9870. The profit made 57 points; the price reached this target within 16 hours.

    If the second variant of trade closing had been applied, when it was necessary to wait for the Awesome Oscillator and Accelerator Oscillator histogram bars to change colour from green to red, then the trade would have had to be closed at the price of 0.9819. The profit would be only six points.

    Example of a Three Indicator Strategy sale

    Let's look at the EUR/USD chart for 26 January 2022. The price had been declining for some time, but could not leave the limits of the sideways correction. The support level of 1.1260 is broken and a signal from the Parabolic SAR is formed: a point appears above the price chart.

    On the Awesome Oscillator and Accelerator Oscillator, the bar graphs have changed colour from green to red. Mark this candlestick as the "signal" candlestick. We can open a deal when the next candlestick opens at 1.1254 at 22:00 terminal time

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Comment


    • How to Use Interest Compounding Calculator

      Author: Victor Gryazin

      interest calculator. Let's take a closer look at this tool. Let's find out what it is, where and how it is used, and look at examples of its use.

      What is compound interest?

      Compound interest in finance is interest income accrued on deposits or investments, taking into account interest previously accumulated for previous periods. Financiers use another term – capitalisation of interest. Although the field of application of compound interest is much broader than capital accumulation, it is still the most popular in this segment.

      Compound interest on a deposit with capitalisation can be calculated daily, monthly, quarterly, and yearly. If not paid out, it can be added to the interest deposit amount to accrue a larger amount in the next period. Thus, the essence of compound interest is that the calculation base increases with time.

      This scheme is also sometimes called "interest on interest". Compound interest multiplies capital at an accelerated rate. The longer the periods in which it is compounded, the greater the return. Combining compound interest with regular investments over a long period of time is a highly effective way of preserving and increasing capital.

      https://blog.roboforex.com/wp-content/uploads/2022/10/CompoundingCalculator-1.jpg

      Why use a compound interest calculator?

      The calculation of compound interest (accruing income with constant reinvestment) is a complex mathematical operation. The formula for the calculation is as follows:

      A = P(1+r/n)^nt

      In the formula:
      • A is the future amount of capital, including accrued interest
      • P is the principal amount of the investment
      • r is the interest rate (decimal)
      • n is the number of interest accruals per period
      • t is the number of periods in which funds are invested
      The formula is not the easiest to calculate, so if you want to avoid making a mistake, you'd better use a tool to help you: a compound interest calculator.

      If, on the other hand, you're not afraid of errors and only need to calculate an approximate return on compound interest, the "Rule of 72" can help. We talked about it earlier in one of our articles.

      Nevertheless, for an accurate and detailed calculation, it is recommended that you use the above tool. It is essentially an investment calculator that helps to calculate the potential return on investment. It can be used to calculate daily, monthly or yearly interest. This versatile tool can be used in many ways, including as a forex interest calculator.

      Read more at R Blog - RoboForex

      Sincerely,
      RoboForex team

      Comment


      • Dear traders!

        This week, the RoboForex company's project called ContestFX will continue, as usual, with the following competitions:

        The 140th competition of "Demo Forex" and the 386th competition of "Week with CFD" have just started.
        The 520th competition of "Trade Day" will start on 09.11.2022 at 12:00.
        The 434th competition of "KingSize MT5" will start on 10.11.2022 at 20:00.

        It does not take much effort to become a participant in our demo trading contest - all you need to go through the registration procedure on our website just once, after which participation in any of the chosen competitions 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

        Comment


        • Scalping Strategy with EMA

          This article is a review of a trading strategy based on a combination of moving averages under - "Scalping Strategy with EMA". Its tactics imply quickly closing profitable positions on minute and five-minute charts. For such active work we need tools with minimal spreads. Every point of profit is important, therefore the major currency pairs EUR/USD, GBP/USD, AUD/USD, USD/CAD are used.

          https://blog.roboforex.com/wp-content/uploads/2022/11/pic-1.png

          The strategy will clearly show how to combine signals from three moving averages with different periods, the total number of which on the chart will be 38. We will detail the rules for opening positions, adding to the short term trend and closing options.

          Adding Scalping Strategy Indicators with EMA

          Only EMA indicators with different periods should be added to the chart. Traders usually use this tool to determine the trend on the market - if the price is above the EMA line, then the trend is bullish and a buy is anticipated. If the price is under the EMA line, then it is a bearish trend and you are supposed to sell.

          The very crossing of the lines of the indicator will also give a signal to open positions, if the EMA with a smaller period crosses the EMA with a larger period downwards - it is a signal for the development of the downward movement. If there is a crossing of EMA with a smaller period and EMA with a larger period from the bottom upwards - it is a signal for an upward movement.

          Often, even a test of the EMA line signals an imminent breakaway from it and the continuation of the existing trend. In our case, 38 lines of the EMA indicator will form support and resistance areas on the chart, the test of which the price will be a signal to open a position.

          How to open a buy position on an EMA scalping strategy

          The rules of the strategy imply several options for opening buy positions. For example, if a trend is developing, the tactic allows you to work in the direction of this trend, instead of just entering only at the beginning of its formation. This is a significant advantage of the scalping strategy, because you do not have to wait for the trend to change, just identify the trend and work according to the proposed rules.

          Let's look at the basic rules for opening a long position on the M1 chart:

          The first long position is opened when the purple EMA lines cross the green EMA lines from top to bottom.

          https://blog.roboforex.com/wp-content/uploads/2022/11/pic-5.png

          Conclusion

          The EMA scalping strategy is a unique tactic where 38 indicators are used at once. The entry rules are quite simple, although they differ from the usual use of moving averages. In this strategy, a sell position is opened when the fast EMA crosses the slow one from the bottom upwards. A buy position is opened when the fast one crosses the slow one from above downwards.

          The strategy also provides an opportunity to work in the direction of the prevailing trend, which is a significant plus, because there is no need to wait for a trend change to open positions. On the downside, it should be noted that the size of the Stop Loss is somewhat disappointing, as it turns out to be larger than Take Profit, which is not always right from the risk management point of view.

          Read more at R Blog - RoboForex

          Sincerely,
          RoboForex team

          Comment


          • NYSE — Probably Main Stock Market

            A stock exchange is a platform where market players can buy and sell securities and commodities. One of the oldest and largest stock exchanges in the US is the New York Stock Exchange (NYSE). It opened in 1792.

            Today daily turnovers reach billions USD, and total capitalisation of securities is over 27 trillion USD. Some calculations say that more than 65% of all trades with stocks happen in NYSE.

            Today we suggest finding out some interest facts from the history of the exchange and discussing why traders worldwide keep a close eye on its activities.

            How NYSE appeared

            The story of NYSE started with signing the Buttonwood Agreement by which 24 brokers formed an investing society with only 2 rules to follow. They had to trade only between each other and pay a small fee for each such trade.

            The first kind of an office was a coffee shop called Tontine Coffee House. There they traded stocks but only by barter method. 25 years later, the society decided to let other players to their trades. All trades went to the exchange that goes on this way these days.

            Main facts in NYSE history

            In spring 1817 the New York Stock Exchange and its inner Exchange Council elected Anthony Stockholm as President of the organisation. Every morning he opened trades and showed the list of shares available for buying and selling: let me remind you that initially only five companies traded in the exchange.

            The new stage of development began in 1837, when telegraph was invented. Brokers grasped at the idea fast and dragged the telegraph line everywhere possible. The goal was facilitating instant exchange of information for making trading decisions faster.

            The first exchange ticket appeared in NYSE in 1867. An American Telegraph employee designed a special machine that emissed paper stripes with description of trades. These papers were sent by managers via pneumatic pipes to typewriters, and they sent the info to brokers by telegraph. Only after this process investors got valid share prices.

            The first stock index — the Dow Jones Transportation Average — appeared in summer 1884. It included 9 main transport companies in the US, and calculations for the index were made by the Dow Jones company founder and Wall Street Journal editor Charles Dow. He used to analyse market behaviour actively and designed the theory that tech analysis is now based on.

            During World War I that began in 1914 NYSE was shut down. Foreign investors were looking for money for military purposes and massively sold their assets in exchanges. At that time the Dow Jones index lost more than 12%, and trades were closed to avoid more crashing.

            This was the longest shut-down in the history of the platform: it took about 4 months. On the opening day, the index dropped even lower. The shut-down did not save the idex from falling but we can only guess how much deeper it could have fallen.

            This was not the last major falling of the stock major: on 19 October 1987 Dow Jones again lost more than 22%, and this day got the name of the Black Monday

            How NYSE works

            A part of trades is done not just by computers but also by people: up to 1,000 brokers work at the exchange every day. This hybrid method of work remained only there — on other platforms everything is automatic. Trade is open on weekdays, from 9:30 to 16:00.

            An interesting tradition is the signal for closing trades: they ring a bell. Previously it was a large gong used for notifying brokers and dealers about the beginning of work but in 1903 it was replaced by an electronically controlled brass bell.

            Ringing the bell in NYSE became a symbolic act. Representatives of companies that are just beginning to trade in NYSE get the honor to ring it.

            Read more at R Blog - RoboForex

            Sincerely,
            RoboForex team

            Comment


            • Dear traders,

              This week, the ContestFX project offers you the following exciting competitions on demo accounts:

              The 140th competition of "Demo Forex" has been running since last Monday.
              The 387th competition of "Week with CFD" has just started.
              The 521st competition of "Trade Day" will start on 16.11.2022 at 12:00.
              The 435th competition of "KingSize MT5" will start on 17.11.2022 at 20:00.

              Let us remind you that in case of victory, all winners of our contests receive prize funds to their real accounts, and they can use them to trade on the Forex market instead of investing their own savings.

              Good luck!

              Sincerely,
              RoboForex Contest

              Comment


              • How to Trade the Bat Pattern

                In this review we will get acquainted with the popular harmonic pattern "Bat". We will learn how to find it on the price chart and what trading signals it gives. We will consider the rules and examples of its formation.

                Description of the “Bat” pattern

                The harmonic Bat pattern is a 5-point graphical pattern formed by taking into account certain Fibonacci ratios. It was introduced by Scott Carney in 2001. The figure has a similar structure to the Gartley's Butterfly, but they differ in Fibonacci ratios.

                It has five points (X, A, B, C and D) and four price swings (XA, AB, BC and CD). The last point in the pattern is D, which is a potential reversal zone. Its appearance is seen as a signal to open buy or sell positions.

                This chart pattern is formed on a variety of timeframes. Often it represents a correction area, after the end of which the preceding trend is likely to continue. For more reliable signals, this pattern can be used in conjunction with classic means of technical analysis - trend lines, support and resistance levels.

                https://blog.roboforex.com/wp-content/uploads/2022/11/bat-1.jpg

                Rules for shaping the “Bat” pattern

                Like many other harmonic patterns, the Bat is defined by Fibonacci ratios. There are automated ways to find this pattern on the chart - special indicators. But you can also determine it yourself, knowing the rules of formation:
                • XA is the first impulse of the price movement on the chart.
                • AB - correction from the first XA movement, ranging from 38.2% to 50%.
                • BC - can range from 38.2% to 88.6% of the wavelength of AB.
                • CD, the final wave, is an extension of 161.8% to 261.8% of the BC section and ends at about the 88.6% correction level of the XA wave.
                • The emergence of the D-point is the final stage of formation.

                How a bullish Bat pattern is formed
                • Wave XA is formed as a result of an upward price impulse.
                • The price then reverses in AB and corrects from 38.2% to 50% of the XA segment.
                • On the BC section, price reverses again and rises to 38.2-88.6% of the AB wave.
                • In the final CD phase, the price reverses downwards and reaches approximately 88.6% of the first XA impulse.
                • After the formation of the pattern, quotes are expected to rise from point D.

                Rules for trading the bullish Bat pattern
                • A buy position can be opened once the D-point has been formed and quotations have started to reverse upwards.
                • The Stop Loss should be placed just below the pattern low at point X.
                • The Take Profit can be based on the B point, the C point or the maximum value of the pattern at the A point.

                https://blog.roboforex.com/wp-content/uploads/2022/11/bat-2.png

                Example of bullish trading in the Bat pattern

                A pattern has formed on the H1 chart of the GBP/USD currency pair. After the start of the upward movement from point D, a buy position can be opened. Stop Loss is placed just below point X, profit taking targets are points A, B, C and higher if there is a strong upward movement.

                Read more at R Blog - RoboForex

                Sincerely,
                RoboForex team

                Comment


                • Dear traders!

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

                  The 140th competition of "Demo Forex" has crossed its "Equator".
                  The 388th competition of "Week with CFD" has kicked off today.
                  The 522nd competition of "Trade Day" will start on 23.11.2022 at 12:00.
                  The 436th competition of "KingSize MT5" will start on 24.11.2022 at 20:00 .

                  To participate in our contest, all you need to do is to go through the account registration procedure just once, getting access to all of the contests in a couple of mouse clicks. If you win, you can start trading in the Forex market with the funds received as your prize instead of investing your own savings.

                  Join us!

                  Sincerely,
                  RoboForex Contest

                  Comment


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

                    We are informing you that changes will be made to the trading schedule due to the Thanksgiving holiday 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 CFDs on US indices (US30Cash, US500Cash, and USTECHCash) and CFD on the Japanese index JP225Cash
                    • 24 November 2022 – trading stops at 7:40 PM server time.
                    • 25 November 2022 – trading stops at 8:00 PM server time.
                    Schedule for trading on CFDs on Metals (XAUUSD and XAGUSD) and CFDs on oil (Brent and WTI)
                    • 24 November 2022 – trading stops at 7:40 PM server time.
                    • 25 November 2022 – trading stops at 8:00 PM server time.
                    Schedule for trading on CFDs on US stocks
                    • 24 November 2022 – no trading.
                    • 25 November 2022 – trading stops at 8:00 PM server time.

                    R StocksTrader platform

                    Schedule for trading on US stocks and ETFs
                    • 24 November 2022 – no trading.
                    • 25 November 2022 – trading stops at 8:00 PM server time.
                    Schedule for trading on CFDs on US stocks and ETFs
                    • 24 November 2022 – no trading.
                    • 25 November 2022 – trading stops at 8:00 PM server time.
                    Schedule for trading on CFDs on US indices (US500, US30, and NAS100)
                    • 24 November 2022 – no trading.
                    • 25 November 2022 – trading stops at 8:00 PM server time.
                    Schedule for trading on CFDs on Metals (XAUUSD and XAGUSD) and CFDs on oil (WTI.oil, BRENT.oil)
                    • 24 November 2022 – trading stops at 7:40 PM server time.
                    • 25 November 2022 – trading stops at 8:00 PM server time.

                    cTrader platform

                    Schedule for trading on CFDs on Metals (XAUUSD and XAGUSD)
                    • 24 November 2022 – trading stops at 7:40 PM server time.
                    • 25 November 2022 – trading stops at 8:00 PM server time.

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

                    Sincerely,
                    RoboForex team

                    Comment


                    • Is the Interest Rate Growth Cycle Coming to an End?

                      Market participants expect that the US Federal Reserve (Fed) monetary policy tightening cycle is coming to an end. The US inflation rate eased to 7.7% in October, further strengthening the belief that the regulator's head, Jerome Powell, will soften his rhetoric. Against this background, the S&P 500 index (US500) is up 15% in two months.

                      Is there really any reason for optimism? In this article, we will try to analyse what is happening to the US economy now, what parameters Mr. Powell is focusing on, why the inflation rate fell in October, and whether there is a chance that this dynamic will continue in the future.

                      What parameters does Jerome Powell monitor?

                      After the COVID-19 pandemic crisis, we saw a sharp rise in inflation. At the time, many investors were saying that it was time to raise the interest rate, otherwise, it would not be possible to control inflation with monetary means.

                      In his speeches, Jerome Powell said that inflation is temporary, there is no need to rush to tighten the monetary policy, and the interest rate hike will start after unemployment has fallen to 2019 levels.

                      In March 2022, the unemployment rate fell to 3.8% in line with pre-crisis levels, and the Fed started a cycle of interest rate hikes already in April.

                      https://blog.roboforex.com/wp-content/uploads/2022/11/FRS.png

                      Many market participants are now wondering when the Fed will bring its monetary policy tightening cycle to an end. On 3 November, Jerome Powell said: "Before rates peak, we need to see a sustained decline in inflation and a series of declining monthly figures will be good evidence of that. Continued rate hikes will be needed to have a sufficiently restrictive effect on the economy and bring inflation back to the Fed's 2% target."

                      This means that one month's data would not change anything, while all the attention of the head of the regulatory body is currently not on the labour market, but on the inflation rate.

                      Has the US economy suffered from the Fed’s actions?

                      A further interest rate hike could bring down the US economy – this is the view increasingly being relayed by the media. If we look at the rate increase, it has risen from 0.25% to 4% in 7 months. Such an increase was only seen in the 1970s during the economic crisis, which was accompanied by high inflation.

                      The first thing we will look at when seeking to find out whether the US economy has been hurt by the Fed's actions is the labour market. Yes, large companies – like Meta Platforms Inc. (NASDAQ: META), Tesla Inc. (NASDAQ: TSLA), and Snap Inc. (NYSE: SNAP) – have reported layoffs, but if we take a look at the number of layoffs in the country, we can see that the figure has been declining since 2021.

                      Read more at R Blog - RoboForex

                      Sincerely,
                      RoboForex team

                      Comment


                      • Dear traders!

                        This week, the RoboForex company's project called ContestFX is waiting for you in the following competitions:

                        The 140th competition of "Demo Forex" is running at "full speed".
                        The 389th competition of "Week with CFD" has just started.
                        The 523rd competition of "Trade Day" will start on 30.11.2022 at 12:00.
                        The 437th competition of "KingSize MT5" will start on 01.12.2022 at 20:00.

                        Do not forget that for winning any of our demo contests you will receive funds to your real account that you can use to start trading in the Forex market instead investing your own savings.

                        Good luck!

                        Sincerely,
                        RoboForex Contest

                        Comment


                        • How to Trade With the ABCD Pattern

                          Author: Victor Gryazin

                          In this review, we will get acquainted with the ABCD harmonic pattern. We will take a look at how it is formed, and how it can be used in trading. We will tell you what tools you will need to find it on the chart.

                          What is the ABCD pattern in trading?

                          ABCD is one of the simplest harmonic patterns. It has only four points (A, B, C, and D) and three price swings (AB, BC, and CD). It looks like a diagonal lightning bolt on the price chart. The last point, D, is formed in the model, which is a potential reversal zone. Its appearance is considered a signal to open buy or sell positions.

                          The ABCD trading pattern in trading is a three-wave correction, after which the price movement towards the main trend can continue.
                          Stages of pattern formation

                          AB is the first movement impulse in the pattern
                          • BC is a 61.8-78.6% Fibonacci retracement of AB
                          • CD is the final wave. It is an expansion of 127.2-161.8% Fibonacci from the BC segment and should be roughly equal to the AB impulse
                          • D is the last point of the pattern, and once it has been formed, the quotes are expected to reverse
                          • The ABCD pattern is relevant for the Forex, stock, commodities, and other financial markets. It gives signals for both buy and sell trading. It is suitable for trading in all market conditions (range, uptrends, and downtrends) and in different time frames.

                          https://blog.roboforex.com/wp-content/uploads/2022/11/ABCD-1-768x533.jpg

                          How an ABCD bullish pattern is formed
                          • The first impulse of the AB price movement is downwards
                          • In the BC section, the price reverses and rises to 61.8-78.6% of AB
                          • On the final stretch CD, the price reverses downwards and reaches 127.2-161.8% of the BC wave. The CD segment should be approximately equal to the first AB impulse
                          • Once the pattern is formed, quotes are expected to rise from point D
                          Rules for trading the bullish ABCD pattern
                          • A buy position can be opened once the D-point has been formed and quotations have started to reverse upwards
                          • The Stop Loss should be placed just below the pattern low at point D
                          • Take Profit can be based on the C point or the maximum value of the pattern at A
                          Read more at R Blog - RoboForex

                          Sincerely,
                          RoboForex team


                          Comment


                          • Main Order Types on MetaTrader

                            Author : Victor Gryazin

                            This overview is devoted to the main types of orders used on MetaTrader platforms. Orders serve to open and close positions, limit losses and take the profit.

                            Main order types in trading

                            For trading in financial markets, there are two main types of orders used:

                            Market order is the simplest and most understandable of all. This is an order to sell or buy the asset at the current market price immediately. The priority of the order is obligatory execution, if only there is enough liquidity in the market. Positions open (or close) at once. When volatility is high, so-called "slips" occur, which means the actual execution price differs from the Bid or Ask price at the ordering moment.

                            Limit order is an order to sell or buy the asset at the specified price. Limit orders will not allow making trades at a worse price than said in the order, yet it is not guaranteed that the order will be executed. In other words, the order will be executed only if there is the limit (or best) price in the market. If otherwise, the order will not be executed.

                            Based on these two orders, there have been creates several order types on MetaTrader platforms. On other platforms, things might work differently.

                            Opening orders

                            Buy Limit

                            This is a limit order to buy the asset at a price no worse than the specified one. Also, this order can be used when you need to limit the price of a not most liquid asset you are buying.

                            For example, when Brent oil price is $80, while the trader wants it cheaper — at $70 — they can place a pending Buy Limit order at the desirable price level. The position will open as soon as the Ask price reaches the specified level.

                            Sell Limit

                            This is a limit order to sell the asset at a price no lower than the one set in the order. This type can be used when you need to limit the selling price of a non-liquid asset.

                            For example, if gold now costs $1,800, and the trader wants to sell it when the price reaches $2,000, they can place a Sell Limit order at this level. As soon as the Bid price reaches the desired level, a selling position will open.

                            Closing orders

                            After a position is open, the trader needs to specify its closing conditions. As a rule, there are two options: Take Profit for a price going as forecast and Stop Loss for a price going against the trader.

                            Take Profit

                            Take Profit is a pending order that closes the position without trader's participation. A placed order automatically closes a gaining position as soon as the price reaches the specified level.

                            For example, the trader buys Brent oil at $70 and expects it to grow to $100 in the nearest future, where they will close the position with a profit. Hence, they can place a Take Profit at $100, and the position will close automatically, as soon as the quotations reach the level.

                            Margin Call and Stop Out

                            There are also such important phenomena as Margin Call and Stop Out.

                            Margin Call

                            This is a notification by which the broker informs the trader that due to the current losses in all open positions the money on the account is not enough to sustain those positions. The trader then needs either to deposit their account or close some of the positions, otherwise a Stop Out might follow.

                            Stop Out

                            Stop Out means forced closing of losing positions by the broker at the current market price when the ratio of the trader's capital to margin reaches a critical level (set by the broker). After the positions close, the trader's deposit will get corrected according to the losses they suffered. Losing positions will keep closing until the said ratio exceeds the Stop Out level.

                            Read more at R Blog - RoboForex

                            Sincerely,
                            RoboForex team

                            Comment

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