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  • How to Invest in S&P 500?

    Author: Maks Artemov

    In this article, we will discuss trading S&P 500. In the exchange, this index is trading under the ticker US500; today, it can be found in many popular trading terminals.

    What is S&P500?

    S&P 500 was created by Standard and Poor’s (currently S&P Global) on March 4th, 1957.

    Earlier, another index called Dow Jones Industrial Average Index used to be popular. It included the 30 largest industrial companies. Also, other indices were there; however, they covered only a small group of companies, hence, did not represent the whole picture of market moods.Standard and Poor’s went their own way and decided to create an index that would show the market situation on the whole and not just the state of things in the industrial sector. This is how the S&P 500 appeared.

    The new index was comprised of 500 large companies with the biggest capitalization from various sectors. However, the number of companies and the exact contents of the index remains prone to change.

    What are the companies in the S&P 500?

    The index includes the 500 largest companies traded in the US stock market. To be listed in the index, a company must comply with the following requirements:
    • capitalization no less than 6 billion USD.
    • registered in the USA.
    • stock liquidity (the number of stocks traded) no less than 250,000 per month.
    • no less than 50% of the stocks available for free trade.
    • profitability during the four last months of the accounting period.

    The list of companies is revised every quarter. If a company turns out to be faulty in a way, it is replaced by another suitable company. Usually, the list loses companies that start generating losses in the accounting period or the liquidity of which drops.

    The leaders of the index are currently the giants of the IT and banking sectors, such as:
    • Apple Inc (NASDAQ: AAPL).
    • Microsoft Corporation (NASDAQ: MSFT).
    • Inc (NASDAQ: AMZN).
    • Facebook Inc (NASDAQ: FB).
    • JPMorgan Chase & Co (NYSE: JPM).

    IT companies take over 27% of the index, healthcare companies – 14%; the shares of the remaining spheres are not that significant, though they comprise more than 50% of the index, taken together.

    S&P 500 is calculated based on weighted capitalization, which means companies that have larger capitalization have more influence.

    How to invest in the S&P 500?

    S&P 500 is good for not only intraday trading but medium-term investments as well. Thanks to many market players being interested, the index demonstrates high volatility and liquidity during the trading session. Also, you can go on trading after the trading session ends, though liquidity will shrink.

    The only limitation for future investors is the high price of the index, which entails the use of leverage or the increase of the deposit.

    Read more at R Blog - RoboForex

    RoboForex team


    • Ho to Trade Bryce Gilmore’s Graphic Patterns

      Author: Andrey Goilov Nowadays, there are plenty of various graphic patterns for trading. Some are classical, some are modernized. Every trader tries to supplement graphic patterns with their own secret features to make them more efficient.

      For example, previously, investors used to trade the Head and Shoulders pattern at the breakaway of the “neck” only; however, these days, many traders do not wait for the pattern to be complete but trade while it is still forming. Thus, they can enter the market with a much shorter Stop Loss.

      Bryce Gilmore is one of the traders who added their rules to and found interesting mechanisms in the work of classic trading patterns. Many patterns from his books coincide with the views of other graphic traders.

      On the one hand, there is nothing complicated to his novelties; on the other hand, one has to spend a lot of time to come to such conclusions on their own. However, with all the books and articles, a beginner only needs to read and reread them thoroughly and apply the knowledge to the current market.

      All Bryce Gilmore’s patterns can be conditionally divided into two groups (like all other graphic patterns): those of trend continuation and those of trend reversal. In this article, we will discuss the main price structures only. The author has plenty of patterns in store but you do not need to know all of them to trade successfully: you can choose a couple and learn how to use them properly in compliance with your capital management rules.

      Trend reversal patterns

      The Head and Shoulders pattern

      Bryce Gilmore insists on calling this pattern like this, and we cannot deny that it is very similar to the classical pattern.

      However, here, there is a large difference between the classical and original approaches. In normal tech analysis, few traders speak about selling from exactly the right “shoulder” of the pattern. As for Gilmore, he notes that if the “shoulders” are more or less equal, we can open a selling or buying position depending on where the pattern is aimed.

      Moreover, he neglects the slope of the “neck” completely: even if the line is heading down, we can still open a buying position provided that the “shoulders” are equal.

      I will remind you that in classical tech analysis, the “neck” must be aimed in the direction of the previous trend. If otherwise, the pattern is not a Head and Shoulders but a Wolfe’s Wave. Some time ago, my colleagues and I singled out this feature and were quite surprised to find a similar idea in the book of another author.

      Read more at R Blog - RoboForex

      RoboForex team


      • How to Analyze Financial Reports of Companies by IFRS?

        Author: Vadim Kovalenko
        In this article, we will discuss a step-by-step algorithm for analyzing the reports of international public companies so that later, you will analyze them yourself. During the report period, a normal person is overwhelmed by recommendations and advice. However, to form a correct and independent opinion, you have to work with the primary source.

        Where to start from?

        Start the analysis from the website of the company: you will find the reports in the section for investors. See an example in the screenshot below:

        Then a section will open, from where you will be able to download all the reports of the company. Here, we see yearly (10-K form) and quarterly (10-Q form) reports. We are more interested in the 10-K. An example below:

        If you are not keen on looking for all those sections on the company’s website, just go to the website of the SEC regulator - and download the documents from there. In the search form, enter the ticker of the company:

        Read more at R Blog - RoboForex

        RoboForex team


        • How to Trade Renko Charts: Main Strategies

          Author: Victor Gryazin

          In this article, we will discuss a strategy using the Renko charts. This is a specific way of representing the price chart that highlights the size of the movement, regardless of time.

          What is a Renko chart?

          Renko candlestick charts are coming from Japan, where they first appeared and were called "renga", which means "a brick". Such candlesticks look like small rectangle boxes/bricks composing the price chart.

          Renko candlesticks are not bound to timeframes, they are focused on price changes solely. When the market is active, there are more Renko candlesticks on the chart; when the quotations are in a flat, and volatility drops, there are less of them.

          A new candlestick appears only when the price exceeds a set threshold. For example, if the set size of a Renko candlestick is 10 standard points, and the price has grown by 20, there will appear 2 white "bricks", 10 points each.

          If the price is falling, the candlesticks on the chart turn black, each of them also reflects a decrease of 10 points. Thus, a Renko chart shows the general direction of the price movement, smoothing out minor fluctuations.

          The advantages and drawbacks of Renko charts

          Renko chart was created for making the main market trend easier to perceive. As well as other methods of price representation, Renko candlesticks have their advantages and drawbacks.

          The advantages would be:
          • A clear averaged representation of the trend.
          • Filtering of meaningless noises on the chart.
          • Smoother work of indicators and advisors.
          • The chart shows the places of probable trend reversals.
          • The chart represents key support and resistance levels.
          Installing and setting up Renko chart in MT4

          To install the Renko charts to MT 4 trading terminal, first of all, download the files of a special expert advisor RenkoExpertAdvisor via a link at the end of this article. Copy the files to the folder Experts.

          In the Main Menu, open File/Open Data Catalog/MQL 4/Experts. Copy the files of the EA into the folder, then restart the terminal.

          As a result, RenkoExpertAdvisor will appear in the Navigate window. To add it to the chart of the chosen instrument, left-click and drag it to the necessary window. Then choose Service on the instrument board, click Settings, then proceed to Expert Advisors. Tick Automatic Trade and Import DLL.

          After choosing the settings, in the upper right corner of the chart, you will see a smiling face and the name RenkoExpertAdvisor. Moreover, in the upper left corner, you will see a text, telling you to open a new Renko chart in the autonomous regime. To do it, choose File/Open Autonomously. You will see a window with a list of autonomous charts. Choose a chart with the parameters specified in the upper left corner of the window with the expert advisor. Open it with a double left click of the mouse. A window will appear with a Renko chart that will be constantly renewed. Now you can add indicators to Renko charts and start trading.

          Read more at R Blog - RoboForex

          RoboForex team


          • RoboForex teamRoboForex: changes in trading schedule (Thanksgiving Day in the USA)
            Dear Clients and Partners,

            We’re informing you that due to the celebration of Thanksgiving Day in the United States of America, several instruments will be traded according to the changed schedule*.

            MetaTrader 4 / MetaTrader 5 platforms

            Trading schedule on CFDs on oil (WTI, Brent), Metals (XAUUSD, XAGUSD), CFD on US indices (US500Cash, US30Cash, USTECHCash) and Japanese index JP225Cash
            • November 26th, 2020 – trading stops at 7:40 PM server time.
            • November 27th, 2020 – trading stops at 8:00 PM server time.
            Trading schedule on CFDs on US stocks
            • November 26th, 2020 – no trading.
            • November 27th, 2020 – trading stops at 8:00 PM server time.
            R Trader platform

            Trading schedule on US stocks, CFDs on US stocks, US indices, and ETFs
            • November 26th, 2020 – no trading.
            • November 27th, 2020 – trading stops at 8:00 PM server time.
            Trading schedule on Metals (XAUUSD, XAGUSD) and CFDs on Crude Oil (BRENT.oil, WTI.oil)
            • November 26th, 2020 – trading stops at 7:40 PM server time.
            • November 27th, 2020 – trading stops at 8:00 PM server time.
            cTrader platform

            Trading schedule on Metals (XAUUSD, XAGUSD)
            • November 26th, 2020 – trading stops at 7:40 PM server time.
            • November 27th, 2020 – trading stops at 8:00 PM server time.
            Please, take into account these changes in schedule when planning your trading activity.

            * – This schedule is for informational purposes only and may be changed.

            RoboForex team


            • The MFI: Peculiarities and Trading Strategies

              Author: Maks Artemov

              Today, we will get acquainted with the MFI (Market Facilitation Index). It was developed by an experienced trader Bill Williams and described in his book “The Trading Chaos”.

              The author aimed at research and quality analysis of the ratio between trade volumes and the price of the asset. He assumed that the trade volume or turnover initiated growth. The larger the volume of the asset, the brighter the price growth.

              Placement and appearance

              In MT4, you can find the MFI in Indicators – Bill Williams. The indicator is displayed in a separate window under the price chart and looks like a histogram made of bars of four different colors. The color and width of the bars are customizable. By default, the colors are as follows:
              • MFI upwards, volume up – Lime
              • MFI downwards, volume down – SaddleBrown
              • MFI upwards, volume down – Blue
              • MFI downwards, volume up
              Usually, it is up to the trader whether to place highs and lows – normally, they are not used in trading by the MFI. The indicator has no other settings.


              What does the MFI show?

              The indicator provides the following information:
              • The green bar means that the number of market operations increases and the trend is getting stronger. The current impulse may continue because new players come to the market and make a lot of operations. This signal is not meant for opening positions because the impulse emerged much earlier, and the price has already covered a long distance. But if the trader already has an open position, the growth of the green bar will mean they were right.
              • The brown bar means that volatility and liquidity are falling because market players are losing interest. Usually, such a bar precedes a flat, and the probability of a reversal is almost null. After the flat, the price may proceed in either direction with equal probability.
              • The blue bar indicates that the impulse is currently developing not because some new players have entered the market but because either buyers or sellers are leaving it. They have lost interest in the asset, and the situation is dubious.
              • The Pink bar shows that both bulls and bears are active. This bar promises a reversal and is most preferable for traders.
              Though the MFI gives certain information to the trader, the author advises against trading by this indicator only. It should be used alongside other indicators or some trading strategy.


              Read more at R Blog - RoboForex

              RoboForex team


              • RoboForex Team launches RFund - a new Alternative Investment Fund

                We’re pleased to inform you about the launch of a European alternative investment fund called RFund, which is regulated by the CySEC, license No. N. LPAIF118/2014. We’re actively expanding and pressing forward, that’s why the creation of our own investment fund was the next logical step of brand globalization.

                The year 2020 will make history as a period that brought us not only the pandemic but also new all-time highs in major global indices. During this time of extraordinary volatility, we’re ready to offer you cutting-edge solutions in portfolio management, which are based on our long-term experience combined with the conservative approach to the choice of assets for investments.

                What makes us different?
                • New approaches to management – using up-to-date methods in risk budgeting and portfolio management coming to replace modeling principles that are based on historic data and vulnerable to high degree stochasticity of relationships between instruments.
                • Approach to diversification – investment policy implies the allocation of most of the assets in the units of other funds – instruments, which are diversified between assets within their instrument class.
                • Conservative approach to the choice of assets – the fund neither uses leverage nor considers investments in complex derivatives on credit swaps, in cryptocurrencies, and other similar instruments.
                • Transparent costs structure – investors pay only a fixed management fee of 2% and a performance fee of 20% on the return that exceeds 7% annual in the current financial year.
                Who can invest with RFund?
                • The Funds is available only to investors from Europe, who are qualified as "Professional investors" or "Well-informed investors".
                • The minimum invested sums for professional and well-informed investors are 100,000 USD and 125,000 EUR (in USD equivalent) respectively.

                RoboForex team