RoboForex - Forex Broker: overview and news

[RF roboforex]

Dear traders!

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

The 149th competition of "Demo Forex" has gained "cruising" speed.
The 427th competition of "Week with CFD" has kicked off today.
The 561st competition of "Trade Day" will start on 23.08.2023 at 12:00.
The 475th competition of "KingSize MT5" will start on 24.08.2023 at 20:00.

To take part in our contests, 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]

Top 3 Stocks From the S&P 500 List with the Highest Dividend Yields in 2023

Author : Eugene Savitsky

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Dear Clients and Partners,

In June 2022, the annual inflation in the US reached 9.1%, a level not witnessed by Americans since the 1980s. The Federal Reserve System (Fed) began swiftly increasing the interest rate, leading to a reduction in inflation to 3% by August 2023. While this value still exceeds the regulator's target by 1%, it can be acknowledged that the efforts of Jerome Powell, the head of the Fed, have proven effective.

Nevertheless, it is crucial to note that even a 3% inflation rate will yearly erode the purchasing power of money. One of the tools capable of generating returns equal to or surpassing the inflation rate is stocks. There are two ways to profit from this asset class: firstly, through the appreciation in the stock value, and secondly, through dividend payments.

Identifying a company whose stock value will significantly increase is notably more challenging than finding a company that offers substantial dividends. Today, we will delve into three issuers that are part of the S&P 500 list and pay dividends exceeding the inflation rate, namely Pioneer Natural Resources Company (NYSE: PXD), Coterra Energy Inc. (NYSE: CTRA), and Diamondback Energy Inc. (NYSE: FANG).

Criteria for selecting companies with the highest dividend yields

1. Dividend Yield: This signifies the ratio of the annual dividend per share to its cost, expressed as a percentage. It serves to assess the attractiveness of a security in terms of receiving passive income from owning it – higher percentage values denote enhanced attractiveness.

2. Debt Load: A minimal or absent debt load indicates that the company's profits are ample both for business development investments and dividend disbursements. This can be gauged through the Long-Term Debt/Equity ratio.

This ratio mirrors the issuer's financial risk and leverage degree, revealing its reliance on borrowed funds. A lower ratio indicates a better scenario, as it implies the company relies more on its equity capital rather than borrowed funds. The optimal Long-Term Debt/Equity ratio varies by industry and business specifics, but a ratio of 0.5 generally indicates financial stability.

1. Pioneer Natural Resources Company

• Dividend yield – 10.18% per annum
• LT Debt/Eq ratio – 0.23
• Founded in – 1997
• Included in the S&P 500 – 2008
• Registered in – the US
• Headquarters – Irving, Texas
• Market capitalisation – 54.5 billion USD

Pioneer Natural Resources Company is engaged in hydrocarbon exploration and production and is one of the largest independent oil and gas companies in the US in terms of reserves and production.

Due to the decline in oil prices, Pioneer Natural Resources Company’s net profit for Q2 2023 decreased by 53% to 1.1 billion USD compared to the corresponding period last year, and earnings per share dropped 47% to 4.42 USD.

Pioneer Natural Resources Company pays two types of dividends: fixed and variable. Based on the Q2 results, the fixed dividend amounted to 1.25 USD per share, and the variable one was 0.59 USD.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[Vlad RF]

Demonstration and Real Accounts: Psychological Differences

Author : Timofey Zuev

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Dear Clients and Partners,

It is no secret that trading results on real and demo accounts always differ, the former results usually being worse. In other words, if you succeed in trading on a demo account, you should always make allowance for the real situation. Some details of the execution of real trade orders, which were not visible on the demo accounts, may lead to this difference; however, such details are not significant enough to lead to serious deviations of the results.

Working on a demo account, the trader has already chosen the timeframe, the instruments, the volume of the opening positions, the instruments of analysis, the levels of entrance and exit — all trading principles and approaches. Yes, the trader is ready to start working with real money, as, in essence, trading on a demo account is in no way different to the real one. However, the one exception here is the real psychological readiness of the trader. The devil is in the different attitude to trading demo money and the trader's own money.

Difference between real and demo trading

1. The trader treats their demo account with ease because they know that they can open another one with new starting capital any moment. As usual, there are lots of explanations to the failures on the previous account, among which one of the most popular one is: the price made a reversal when I was absent from the computer, so I could do nothing.

There is yet another category of traders who open a new account upon receiving a loss on the previous one — they just like it to begin trading from a profitable trade, and no other way. However weird it is, but they do not even realize that it will not be possible on a real account, as they will not be forgetting losses there with such ease.

It would be much wiser to allow for a limited number of paid demo accounts. In this case it is unlikely that traders were so light-minded.

2. Trading strategy is better visible on a demo account. Why? Because there is nothing easier than receive a planned Stop Loss so long that the money is not real. And nothing easier than wait for a Take Profit with the whirlpool of ideas of what you could buy on that money if you closed the position now. There is no need to change the volume of the position during trading on a demo account, as there is no fear of another loss or a decrease of the profit. That is why the trader can execute their trading plan without altering and impulsive correcting.

Reasons for losing the deposit

The reasons for losing the deposit are mostly psychological, including:

Greed. Upon reaching their goal, the trader cannot brace themselves and keeps trading, willing to earn more or make the sum tidy. They may go even further and try to make enough profit for both life and trading

Proceeding to the next goal without reaching the first one. If the trader starts receiving stable profit, their vigilance fades, and they relaxes, believing in their professionalism. Their appetite grows accordingly, so the trader thinks: what do I need a bike for if I can earn for a car? However, they are likely to get none: goals are to be chosen and reached subsequently.

Reinvesting. Reinvesting itself is good for it helps increase the working capital and the profit by increasing the volume of trades. However, this method should be used with much care. Just a part of the profit should be left for growing the deposit, no the whole of it. Why? Because a series of losses or an unstable profit may follow, and the trader, willing to increase the deposit (if it is small) or get more profit (if the deposit is large), is likely to lose all that they have earned. As a result, they will get back to the starting point.

Summary

I would like to mention that, working on a demo account, the trader will not feel the influence of these factors. Call it the charm of money.

Real and demo accounts have a too big difference, and the transition requires psychological adapting. One way to make the transition to real trading easier is using cent accounts. It is advised to have the same volume on the cent account as it is planned to open the main account with.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[RF roboforex]

Dear traders!

This week, the ContestFX project, as usual, is waiting for you in the following contests:

The 149th competition of "Demo Forex" is approaching the final stage.
The 428th competition of "Week with CFD" has just started.
The 562nd competition of "Trade Day" will start on 30.08.2023 at 12:00.
The 476th competition of "KingSize MT5" will start on 31.08.2023 at 20:00.

Let us remind you that upon winning any of our demo competitions, you'll receive prize funds to your real account which you can use for trading in the Forex market instead of your own savings.

Good luck to all traders!

Sincerely,
RoboForex Contest

[Vlad RF]

Economic Indicators - The Basis for Forex Trading Strategy

Author : Timofey Zuev

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Dear Clients and Partners,

Let us have a look at the main economic indicators and their influence at the currency rates. The knowledge and understanding of these indicators are the basics of fundamental analysis and forecasting of price movements.

Interest Rate

Interest rate is an efficient instrument of credit and monetary policy of the state. Increasing interest rates, Central banks regulate demand for loans, reducing it, which decreases the expenses of people and impedes economic development. This measure is meant, first and foremost, for reducing the inflation rate and for prevention of overproduction of goods.
Decreasing interest rates leads to an increase in demand for loans, enhancing economic development.

The size of the interest rate is the basis for other economic parameters — rates of state and corporate bonds, credit rates for individuals and legal entities, etc. Central banks do not frequently change interest rates: this is a major market event, and all market players track such changes very carefully.

Gross Domestic Product (GDP)

The GDP is generalized data about the sum of the added value, produced by all producers in the country during a set period of time. The GDP surplus demonstrates the economic development of the country, its speed. Stable growth of the GDP is characteristic of stable economic development and also strengthening of the national currency, while a slowdown of the GDP growth means problems with the country's economy. The market reaction on the news about the GDP, the initial as well as corrected, is rather active and usually leads to serious movements of currency rates.

A report on the GDP is a wide analysis of all sectors of a country's economy. That is why different market players pick up the paragraphs that are of interest to them and make conclusions about the state of development of this or that country.

Consumer Price Index (CPI)

Consumer price index (CPI) is the main indicator of inflation in the country. For its calculation, the prices of the consumer goods basket during a certain period of time are used. In each country, the set of goods in the basket is different and is formed on the basis of statistical data. Such goods may be food, everyday objects, services, etc.

The prices for food and energy sources are the most volatile, so along with the CPI a so-called Core CPI is calculated, the latter including this category of goods from the consumer goods basket.

The CPI data is normally published on the tenth workday of each month as the percentage of the changes that have happened. In other words, what is published is the information by how many percent the current values have changed in comparison with the previous ones. The news about a change of a CPI value by just 0.2% leads to rather strong fluctuations of currency rates.

Producer Price Index (PPI)

Producer price index (or PPI) is an indicator of the price changes for the goods produced by national producers. The index includes the price for the raw materials, produced in the country and imported, on the intermediate products, on the finished products. The index includes all stages of goods production, as well as all spheres of production and agriculture. The difference from the CPI is that it does not include services and provides the analysis of price changes only at the level of primary wholesale trade.

Along with the PPI, the Core PPI data is also published; it does not include the prices for the goods of food and energy industries due to their high volatility. The PPI is published monthly on the tenth workday simultaneously with the CPI.

Trade Balance

Trade Balance, or International Trade, is the difference between the sum of export of goods and services and the sum of the import.

It influences exchange rates directly and reveals the competitiveness of the goods and serves, produced in the county, on the international market. Favorable trade balance (the situation when export surpluses import) signifies inflow of capital into the country, production development and, on the whole, has a positive influence on the economy.

Conversely, a deficit of trade balance, i.e. the situation when import surpluses export, signals low development of production, a lack of competitiveness of the national goods and is a generally negative factor for the country. This leads to the growth of the national debt as well as has a negative influence upon the exchange rate of the national currency, because its supply increases due to the necessity to buy more currency of the exporting state.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[Vlad RF]

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

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Dear Clients and Partners,

We are informing you of the upcoming adjustments to the trading schedule due to the Labor Day holiday in the US.

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

MetaTrader 4 / MetaTrader 5 platforms

Schedule for trading on CFDs on the US indices (US30Cash, US500Cash, USTECHCash) and the Japanese index JP225Cash

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

Schedule for trading on Metals (XAUUSD, XAGUSD) and CFDs on Oil (Brent, WTI)

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US stocks

• 4 September 2023 – no trading
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US futures

• 4 September 2023 – trading stops at 8:00 PM server time
• 5 September 2023 – trading as usual

R StocksTrader platform

Schedule for trading on US stocks and ETFs

• 4 September 2023 – no trading
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US stocks and ETFs

• 4 September 2023 – no trading
• 5 September 2023 – trading as usual

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

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

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

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US futures

• 4 September 2023 – trading stops at 8:00 PM server time
• 5 September 2023 – trading as usual

Please take note of the above amendments to the trading schedule as you plan your trading activity.

Sincerely,
The RoboForex team

[RF roboforex]

Dear traders!

This week, a RoboForex project called ContestFX presents you the following demo competitions:

The 150th competition of "Demo Forex" and the 429th competition of "Week with CFD" have just started.
The 563rd competition of "Trade Day" will start on 06.09.2023 at 12:00.
The 477th competition of "KingSize MT5" will start on 07.09.2023 at 20:00.

It does not take much effort to participate in any of our contests: all you need to do is register a trading account just once and then get access to any of the competitions you like 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]

7 Effective Trading Strategies for Beginners and Advanced in 2023

Author : Andrey Goilov

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Dear Clients and Partners,

In R Blog, we have discussed a whole range of forex trading strategies — from the simplest to the most intricate ones, from those suitable for beginners to those meant for experts, those with and without indicators. Today, I will try to enumerate 7 trading strategies of 2022, which will be especially useful for you if you have not tried some of them yet.

Always keep in mind that however beautiful trading strategies may seem, never rush at using it on real money. Start with a demo account where you can painlessly master the strategy, detecting its strong and weak sides. Only after you reach good results try trading on a real account.

Explore a world of diverse trading strategies in the list below, each accompanied by a comprehensive post featuring profound descriptions and clear trading rules. Simply click on the links corresponding to the strategy names to unlock all the essential information you need to confidently apply them in the financial markets.

1. The Fishing trading strategy

The Fishing trading strategy is meant for D1, however, you may try it on timeframes no smaller than H1. The strategy uses special indicators that you may download from the detailed description of Fishing.

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The trading strategy gives two main signals for opening a position: a breakaway of the trendline drawn by the indicators and breakaways of the special sales and buy levels. In short, the whole work of Fishing is based on the indicators built in the strategy.

An obvious advantage f the method is trading on D1: you do not need to spend all of your time at the trading terminal; another advantage is that you trade the trend. The drawbacks are the lack of back-testing because the indicator draws the lines for the current moment only.

2. Woodies CCI trading strategy

The Woodies CCI trading strategy is based on an indicator with the same name — Woodies CCI. It will suit those who prefer analyzing the price chart themselves. The author offers various ways of trading by the indicator: using breakaways of trendlines, graphic levels, bounces off the zero line.

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The author gives an interesting variant of trading the indicator chart; in essence, we do not need the price chart at all, you may open positions by the Woodies CCI signals only. The drawback is exactly the difficulty of such a system for beginners; for good work of the trading strategy, you still need to know the basics of tech analysis. On the other hand, you can back-test all the signals, gaining useful experience of work with the indicator.

3. Three Moving Averages strategy

Moving Averages are the oldest instrument of tech analysis. As soon as a strong trend begins, virtually no indicator will give better signals by the trend.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[RF roboforex]

Dear traders!

This week, the ContestFX project is waiting for you with the following contests:

The 150th competition of "Demo Forex" has accelerated.
The 430th competition of "Week with CFD" has just kicked off.
The 564th competition of "Trade Day" will start on 13.09.2023 at 12:00.
The 478th competition of "KingSize MT5" will start on 14.09.2023 at 20:00.

We remind you that upon winning any of our competitions, winners receive prize funds to their real accounts and they can use those funds to make a profit in the Forex market instead of investing their own savings.

If you want to be one of the winners, don't miss your chance!

Sincerely,
RoboForex Contest

[Vlad RF]

NZD/USD Forecast: Will the Decline Continue in 2023?

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Dear Clients and Partners,

NZD/USD (New Zealand Dollar versus US Dollar) has been on a decline since the beginning of 2023. On 2 February, the pair reached a yearly high at 0.6534, followed by a gradual drop in price and eventually hit a low of 0.5887 on 29 August. At the time of writing, the quotes are within a correction phase at the level of 0.5979.

In this article, we will examine the key factors affecting the NZD/USD movements. We will conduct a technical analysis of the chart, share expert forecasts for 2023-2024, and aim to understand whether the decline of the pair will continue.

Overview of the NZD/USD currency pair

NZD/USD is one of the major currency pairs, with the New Zealand dollar ranking as the 14th most traded currency in the world according to a survey by the Bank for International Settlements (BIS), published in October 2022. It has held the number 10 spot since 2010 but was eventually overtaken by the Singapore dollar, Swedish krona, Korean won, and Norwegian krone.

The base currency in the NZD/USD pair is the New Zealand dollar, the country’s monetary unit and the quoted currency is the US dollar. The behaviour of the pair’s quotes depends on economic and political events in the two countries.

Trading characteristics of the NZD/USD pair

• The currency pair is traded round the clock from Monday to Friday, with the highest activity observed between the American and Asian sessions
• The pair is characterised by low average daily volatility within the range of 700-1,000 pips, with maximum movements in 2023 reaching 1,600 pips per day
• It is considered quite liquid in the foreign exchange market, which is why the spread for NZD/USD is minimal

Dynamics of the NZD/USD currency pair in 2023

The NZD/USD currency pair has been demonstrating a moderate downward trend, starting the year at the 0.6337 mark, and hitting an annual high near 0.6534 on 2 February. By March, the quotes had reached 0.6084, which was followed by a prolonged correction that lasted for 5 months. During this correction phase, the upper boundary was at the 0.6380 level, while the lower boundary hovered near 0.6065.

In July 2023, following the third test of the 0.6380 level, the NZD/USD quotes headed downwards and gained a foothold below 0.6065 on 11 August. At the time of writing, it can be concluded that the New Zealand dollar has been experiencing a gradual decline against the US dollar from January to August inclusive.

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Factors influencing the NZD/USD price

Economic data

According to an economic review by the New Zealand Parliament, the country’s economy contracted by 0.1% in Q1 2023. Data for Q4 2022 was revised upwards with the contraction value increasing from 0.6% to 0.7%.

According to Stats NZ, in Q1 2023, 9 out of 16 industries saw a decline in economic activity, with the business services sector shrinking by 3.5%. It is worth noting that the country’s economy has been contracting for the second consecutive quarter.

This is primarily driven by high inflation. For example, prices of fruits and vegetables rose by 18.4% over a year, while prices of meat, poultry, and fish added 11.7% with inflation on food products remaining over 12%. According to economists, other reasons include reduced consumer spending and a weakening real estate market.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[Vlad RF]

USD/JPY Forecast: Is the Japanese Yen’s Decline Set to Persist?

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Dear Clients and Partners,

USD/JPY ranks among the top three most traded currency pairs in international trading. In this article, we will examine the key factors affecting the USD/JPY exchange rate, analyse the dynamics of price changes in 2023, and explore the short-term and medium-term forecasts provided by experts.

Overview of the USD/JPY currency pair

The base currency in this pair is the US dollar (USD), the official currency of the US. In addition, it serves as the global reserve currency in international trade and financial markets. The US dollar is considered a benchmark currency and the most widely used asset in transactions worldwide. The Federal Reserve System (the Fed), functioning as the central bank of the US, holds the authority to issue currency.

The second currency in this pair is the yen (JPY), the national currency of Japan. It ranks third by popularity in the foreign exchange market, following the US dollar and euro. The Bank of Japan, the country’s central bank, holds the exclusive right to issue banknotes and coins.

The USD/JPY exchange rate shows how many Japanese yen the market gives for one US dollar. Fluctuations in the pair exchange rate reflect the comparative state of the current economic conditions in the US and Japan. USD/JPY is one of the major currency pairs, known for its high liquidity. Together with EUR/USD and GBP/USD, it ranks amongst the top three most traded currency pairs in the foreign exchange market, accounting for approximately 13% of the total trading volume.

Key trading characteristics of the USD/JPY pair

• The currency pair is traded round the clock from Monday to Friday, with significant trading volumes during the Asian and American sessions, leading to major movements for USD/JPY
• The pair is characterised by moderate average daily volatility within the range of 700-800 pips. However, during times of stock market declines, it has the potential for strong movements exceeding 2,000 pips per day
• The spread for USD/JPY is considered minimal thanks to its high liquidity and moderate volatility

USD/JPY movements in 2022-2023

In 2022, the US dollar was greatly supported by steady growth of the key interest rate in the country and strengthened significantly against the yen. The pair rose from 115.00 to 152.00, which was the highest reading over the last 32 years. After the price hit a high of 152.00 at the end of 2022, a downward correction followed, which was caused by expectations of the potential tightening of the Bank of Japan’s monetary policy.

In 2023, the weakening of the yen exchange rate against the US dollar persisted with the currency pair trading at 130.00 at the beginning of the year. The yen is under pressure due to the lack of clear signals from the Bank of Japan indicating when the tightening of the monetary policy will start, which contributes to further growth of the USD/JPY quotes.

At the same time, the Fed continued its interest rate hiking policy in response to increasing inflationary pressure. The difference between the rates resulted in the further weakening of the yen and the gradual growth of the pair exchange rate. On 16 August, at the time of writing, the quotes managed to rise above the local daily high of 145.00.

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USD/JPY technical analysis

USD/JPY has been showing steady growth since January 2023, moving in the ascending daily channel. In early July, the price demonstrated a sharp downward reversal from the upper boundary of the channel and the resistance level at 145.00, where there was the 61.8% Fibonacci retracement level from the previous fall. Following this, the quotes rebounded from the lower boundary of the channel and continued to rise.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[RF roboforex]

Dear traders!

This week, a RoboForex project called ContestFX will continue, as usual, with the following demo competitions:

The 150th competition of "Demo Forex" is running at "full speed".
The 431st competition of " Week with CFD" has just started.
The 565th competition of "Trade Day" will start on 20.09.2023 at 12:00.
The 479th competition of "KingSize MT5" will start on 21.09.2023 at 20:00.

If you want to take part in our contests, all you have 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.

Good luck to all traders!

Sincerely,
RoboForex Contest

[Vlad RF]

Basics of Risk Management in Trading. How to Avoid Losing Money?

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Dear Clients and Partners,

Sooner or later, all traders who make deals on financial markets have second thoughts and ask themselves a question: “How do I more efficiently use my trading account in order to get profit and avoid losing money?”

As a rule, these thoughts don’t go any further and when beginner traders make transactions, they often risk all their money, “at full throttle” so to say, without following important rules for market operations. As soon as they get a little free money, beginners open another position and, when it comes to the crunch, lose all their orders and entire deposit. To avoid such situations, people created and developed some specific rules to manage their capital and risks. No matter how much money you have on your account – losing all will be unpleasant anyway.

Rules of risk management

Let’s see into all these rules and recommendations, which are intended to help us save money and avoid unnecessary risks.

Use available amount of money

First of all, one should open a trading account at one’s own available money. This is a sum, which a trader can afford to lose without any drastic consequences to their personal or family budget. At the same time, the amount of money should be enough to provide a trader with a freedom of making trading decisions. A deposit opened with borrowed funds or the last of a trader’s money is “doomed” from the start. The reason is very simple: in case of losses, a trader will try to win back their money, which means that a well-thought strategy will transform into a reckless pursuit with logical sad results. Hardly anybody wants to face such outcome in their trading careers.

Use Stop Loss orders

Secondly, one should understand the Stop Loss system. Ignoring Stop Loss orders is one of the most common mistakes made by both beginners and experienced traders. Many traders think that they can “outlast” a loss-making deal and the price may return to previous levels. In reality, these expectations often fall short and after losing time and money, a trader closes this position in the red. Or it might be much worse – the positions is automatically closed after Stop Out.

There is a simple approach that helps avoid such situations. All you have to do is follow the rules below:

1. Don’t open a position using all your money.
2. Before opening a position, one should estimate not only possible profit, but possible losses as well. Ideally, it should be 1 to 3 ratio or more, where there is 1 USD of possible loss to 3 USD of potential profit. At the same time, Stop Loss value in the account currency shouldn’t be more than 2% of the account funds. For example, there are 10,000 USD of funds on the account, which means that in the first transaction the loss amount for a single open position shouldn’t exceed 200 USD. The same math is applied further: after losing 200 USD, there will be 9,800 USD left on the account, so the next time the loss amount shouldn’t be more than 196 USD. In this case, you should estimate the loss amount based on 9,604 USD on the account (minus 2% again, etc.). A possibility that all positions will be loss-making is rather low, and while a trader has a reasonable approach to trading and follows the above-mentioned ratio, they have more chances to find themselves “in the black”. It’s definitely not difficult. In no way one should ignore Stop Loss and in no way one should change the Stop Loss level downwards in hopes of reverse. However, Stop Loss orders may and should be modified, but only in cases when the price is moving in favorable direction.

Typical mistakes of traders

Sometimes traders come up with an idea to average out when a position is in drawdown. However, this is another trap: such strategy will surely result in increase of the current loss amount, although there might be some very rare cases when this method helps traders avoid losses and get profit. Still, in most cases investors, who use this approach, are moving towards failure in quantum leaps. Not less and sometimes more problems may be delivered by so called locks (locking an open position with an order of the same volume but different direction). I don’t mind this method, but for successful outcome it requires rich trading experience and careful planning, that’s why inexperienced traders may only stave off their inevitable failure.

Attempts to win back their money ruined trading careers of many beginners. To avoid this, one should clearly define goals for the current trading session before starting to trade. Everything should be very concrete and specific: goals should consider not only forecasts on profit, but on losses as well. In case any of the planned scenarios turns into reality, one should stop all trading operations for the day.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[Vlad RF]

How to Create Your Own Trading System?

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Dear Clients and Partners,

It happens very often that beginners start trading on financial markets and take these operations as some kind of a game of luck or gambling, but not as a serious, systematic, and sometimes routine work. For the first little while, a “newly-made” trader is in the habit of using gambling methods and tactics, such as Martingale system, when a gambler doubled their bets after every loss.

Quite often, there are approaches, which imply the transaction price averaging by buying or selling an asset at a better price when the market moves against the direction chosen in the beginning. Another thing worth paying attention to is the way of choosing entry points by beginners. In many cases, entry points are chosen in a random way and as a rough guess. Other signals may be different technical indicators.

After a while, having gained some painful experience, a trader starts learning basics of fundamental and technical analysis, take part in different seminars and webinars held by experts in trading and analyzing financial markets, buy subscriptions to trading recommendations and signals. As time goes by, a trader gets mixed results along with knowledge and skills, and, as a result, is led to the realization that trading is a serious activity, which requires a systematic approach, that’s why it may be necessary to develop their own comprehensive trading system.

What is a trading system?

The definition of a trading system implies a method or a scope of rules, which allows traders to understand in a very short period of time what is happening on the market at the moment and assess whether there are chances to open a position, and if yes – what position, long or short. In other words, a system should answer such questions as:

• Is it okay to buy right now?
• Shall I sell?
• Should I trade at all right now or it would be better take a break?

A trading system should contain elements of strategies, tactics, and money management. Strategies are defined by the market segment, where a trader is going to trade: Forex, stock market, commodity market, or all of them together. After deciding on the market, it is necessary to choose trading instruments and timeframes. However, the most important thing in the strategy is a trader’s perspective on the market. It can be either a logical (not necessarily linear) sequence of events and a regular asset pricing policy or some chaotical form of existence of finances. This is where a trader should specify the logic for the market behavior patterns and regularities, which will form signals for opening and closing positions.

Tactics should help to define how positions would be opened and closed: according to indicator signals, after the price breaks some particular level, upon a pullback, whether a loss-making position should be locked, how big the profit should for closing a position, how Stop Loss Level is defined, or whether a position would be trailed.

Many people think that money/risk management is the core of the entire system, which is to guarantee permanent profit in the long-term. Here a trader should specify the amount of their initial capital, a procedure (and periodicity) of profit withdrawal or reinvestment. Also, in this part a trader should decide on the minimum lot and the maximum position volume, whether they are going to use “Martingale” system or not, or implement the price averaging approach. Still, some of the most essential questions to be answered are Stop Loss and Take Profit levels for every transaction, of course if the system implies using Stop Loss and Take Profit orders in the first place.

What about your own trading system?

The question is surely very logical, but the answer is very simple: over the years, hundreds and thousands of trading systems have been created, but none of them can be considered as a perfect one for everybody. Trading is a very personal, if not to say private, thing for every trader, so it is impossible for everyone to use the same methods and approaches. However, one can’t deny the fact that newly-developed systems use ideas implemented in old ones and quite often blend into each other.

A recipe for creating your own trading system is quite simple. You should understand that it is impossible without knowledge and skills – these things are “must have”. Every trader should create a system based on their own nature. If you like to sleep in, create a system for intraday or mid-term trading. If you want to earn a million in a short period of time, be ready to invest at least half a million – as a result, you need to plan your profit based on actual money that you have. But first of all, a trader has to decide on how much money they want to make a day, a week, a month, and how much money they are willing to risk. And the last, but not the least – a trader should strictly follow their system and avoid any emotional outbursts.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

[RF roboforex]

Dear traders!

This week, the ContestFX project is waiting for you with the following contests:

The 139th competition of "Demo Forex" has reached the "finish line".
The 432nd competition of "Week with CFD" has kicked off today.
The 566th competition of "Trade Day" will start on 27.09.2023 at 12:00.
The 480th competition of "KingSize MT5" will start on 28.09.2023 at 20:00.

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

Good luck to all traders!

Sincerely,
RoboForex Contest