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  • How to Beat Greed in Forex?

    Author: Victor Gryazin

    The ability to control your emotions lies at the basis of your expertise as a trader. If a trader falls prey to their emotions, they lose control over their trading. This means breaking the rules of your trading system and, as a rule, ends in losing your money.

    In this overview, we will discuss what is greed in Forex and how to beat it.

    How does greed appear?

    Many people start trading in the hope they will get reach in a short time. This misjudgment is supported by fantastic stories of success spread by the media. You might have heard of a young trader from the US Timothy Sykes who started trading in high school and earned his first million by the age of 21. Sounds amazing, doesn't it?

    However, many neglect the fact that Sykes achieved this by long and painful training, making mistakes, losing money, but perfecting his strategy, and coping with his emotions. Experiences traders know that trading provokes the strongest human feelings and passions that you need to bring under control. A bright example is greed that can lead to losses and depression if you let it rule.

    Greed is an unstoppable desire to own more and more fortune. Some might say that this is all personal, and there is nothing reproachable in the craving for more. However, greed is usually accompanied by unrealistic expectations and hopes, and a lack of self-control. This becomes a large stumbling rock in the trader's way to success because they start breaking their trading rules, which leads to losses.

    Also, greed increases stress and nervousness that nag on the trader throughout their work. This is a direct way to exhaustion that makes it difficult to think rationally about trading in financial markets altogether. Hence, you need to know how to detect greed in the early stages and fight.

    Main symptoms of greed

    https://blog.roboforex.com/wp-content/uploads/2020/12/shutterstock_1037937418.jpg

    Let us have a look at the main symptoms that signal the advent of greed.

    Unrealistic expectations

    Ambitions are great when they are rational. However, when it comes to money, one's common sense often loses the battle to greed, especially if the first couple of trades was a success. Trading on a demo account, which is where most traders start from, is peculiar in the sense that there is no psychological barrier in it — the money is not real. On a demo account, trading is fun.

    That is why many over-ambitious traders rush at switching to a real account. They think that if they made it on a demo, real trading will also go smoothly, so why to waste your time on sheer practice. Their expectations are too high, they imagine how they become millionaires in a week. However, real trading quickly sobers them, but the lack of due preparation and money-management skills leads to losses.

    Poorly based hopes

    A poorly based hope for a profit must in no way be the moving force for a trader. Such hopes, having no real support, lead to increased risks. This feeling is characteristic mostly of beginners, who hope that their trades will for sure bring them a profit if they wait for a little.

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Comment


    • Ten Most Popular Mistakes in Forex Trading

      Author: Victor Gryazin


      In this overview, we will discuss ten common mistakes made by Forex traders. Knowing these mistakes in the face, you can try to avoid them and enhance your trading.

      1. Bad preparation

      Quite a common mistake among beginners is trading without a due level of preparation. Having listened to some basic course about trading or having read some literature on their own, a trader rushes at real trading in the hope to start making money at once. As a rule, the market punishes them for the haste, and they waste their deposit.

      Theoretical preparations give only the basic understanding of how Forex works and how to trade in it. To learn how to make money, you need practice. In my opinion, you need no less than a year of practice (preferably under the guidance of an experienced trader) on a demo or small real account before you start applying your knowledge to serious sums.

      2. Unsystematic trading

      https://blog.roboforex.com/wp-content/uploads/2020/12/shutterstock_1803410611-945x630.jpg

      A trading system is the main instrument of a trader that makes his advantage in the market and helps them earn money stably. In other words, this is a certain set of proven trading rules that helps to make a profit. Any system, of course, can cause losing trades but the overall result (during a month, quarter, year) must be profitable.

      However, if a trader does not have a neat, clear, and proven trading system, and they make trades chaotically, sooner or later they will lose their deposit. Forex never forgives careless trading: if you trade without a system, there are more chances that you will lose than gain. You still can make a profit on random trades but your luck will come to an end once. In the long run, you can only succeed with the help of a reliable trading system.

      3. Following other people’s advice

      Another mistake of beginners might be following other people’s advice blindly. There are plenty of advisers on the net that will always tell you how to invest “correctly”. However, not all of them are necessarily successful trades, and anyway, you will not last long on other people’s wit, you need to have your opinion.

      Read more at R Blog - RoboForex

      Sincerely,
      RoboForex team

      Comment


      • How to invest 10,000 USD?

        Author: Andrey Goilov


        A not long time ago, we discussed the possibilities of investing $1,000. And if it was a rather small amount, then $10,000 is looking much more fascinating for investments.

        To find the correct answer to this question, we should take several things into account. First of all, goals and periods of investments. If the period is rather short, then one may risk and consider aggressive methods of investing. If you need to use the money, which you want to invest, in a couple of weeks or months, then you can choose an option of investing it in stocks that may bring profit in years, that’s why investment horizons are a very important parameter.

        Another factor is your attitude to risks, which can be assessed by answering some questions, for example, how much will your life change if you lose this money? If your appetite for risks is okay, then you can try the currency market and trade with the leverage according to a chosen strategy.

        Emotions have a very significant influence on investments: a lot of beginner investors tend to close positions when the market starts falling, at the time of a slight drawdown, which may sometimes be considered as a good time for buying. If emotions can’t deal with such drawdowns, it might be better to switch to conservative ways of investing.

        What is the best way to invest $10,000?

        The modern world offers plenty of ways to invest your money and some of them don’t even require you to leave home. However, you should remember that many of the offered investment methods are of speculative nature, while more aggressive ways imply significant risks. Moreover, unfortunately, but the previous results shouldn’t be considered as a prediction of receiving profit in the future because financial markets are quickly changing, as well as global affairs and events. Let’s discuss the most popular investment methods.

        Stock market

        https://blog.roboforex.com/wp-content/uploads/2020/12/stock-market.jpg

        There is an opinion that if there is $10,000, one can trade on the stock market with comfort. Still, this trading implies not only buying stocks: an investor must follow the news and behavior of stocks. The most part on investors seeks to buy during the market meltdown because later it will recover and the price will go up. However, the anticipation of a rebound may take much time.

        For example, Warren Buffett dissuades from choosing any particular stocks but offers to invest money in some unexpensive companies. If you take a closer look at Buffett’s portfolio, you will find shares of such companies as Apple, Bank of America, Coca-Cola, American Express, JP Morgan Chase, Moody’s, Goldman Sachs.

        These companies’ shares plunged early in the year but they are growing again and, probably, may reach their peaks in the nearest future. Such market movements confirm that the best possible moment for buying stocks might be the time when they fall to lower prices because such investments are not considered to be short-term.

        Read more at R Blog - RoboForex

        Sincerely,
        RoboForex team

        Comment


        • Тop-5 of impressive leaps on the global market in 2020

          Author: Server Ametov


          Don’t worry, it’s not a “year in review” yet but we’re getting pretty close to it. Today, we’ll try to carry you away with the list of the most dramatic ups and downs in quotes of 2020. Enough with the prelude – let’s get to the point!

          WTI

          The “black gold” market is still terrified when remembering April 2020: on April 20th, the price dropped to the bottom at -$37.63 per barrel, thus losing 305.97%. Just in case: it was neither hyphen nor en dash, it was a minus sign.

          Due to the spread of the coronavirus, quarantine restrictions were introduced almost everywhere in the world. Borders were closed, the transport sector froze – the demand for the oil plummeted quickly and frighteningly, while the daily output was just about to go up: on April 1st, the OPEC+ agreement, which prevented the largest oil-producing countries from increasing the production, fell apart.

          Under such conditions, oil reservoirs were filled very quickly. Early in April, a major hub for WTI in Cushing, Oklahoma, was 72% filled. This was probably the case when an optimist would say 28% empty instead of 72% full.

          The expiration date of the May futures was quite close, the “black gold” was needed by no one and didn’t have any extra place to be stored, that’s why investors started selling it in a big way, thus collapsing the market by more than 300%.

          Chesapeake Energy

          Hard times for Chesapeake Energy started this spring. The energy prices plunged, shale oil production became subeconomic, the company’s debt reached $9.16 billion, while losses for the first quarter exceeded $8 billion, which is by 400 times more in comparison with the same period of 2019.

          In November, Chesapeake Energy shares cost less than $1, thus making the circulation of shares at the NYSE impossible and almost forcing delisting. To avoid this, the company’s management decided to make a reverse stock split 200 to 1 but this move barely improved the situation.

          On April 12th, the OPEC+ had a new agreement, according to which, oil-producing countries had to cut the daily output starting from May 1st. This agreement brought hope for a soon recovery of the sector and drove up the demand for shares of undervalued companies of the segment.

          Speculators, who had been increasing their short positions for a long time, didn’t expect shares to grow and had to buy them at any available price. As a result, on June 89th, Chesapeake Energy shares skyrocketed by 181.94% and reached $69.92 per share.

          However, it was a one-day leap, which, perhaps, was, the final good news for the company. In late June, it filed for bankruptcy and got a delisting memo from the NYSE.

          Biogen

          For many years, an American biotechnological company called Biogen has been developing Aducanumab, a medication to fight Alzheimer's disease. At long last, in August 2020 the firm put a request for approval from the US Food and Drug Administration (FDA).

          On November 4th, the regulator announced that it had received enough information from the pharmaceutical company and was assessing the possibility of approval of Aducanumab as high. The market was positive in its response to this news: Biogen shares went up by 44%, from $247.01 to $355.63 per share.

          Read more at R Blog - RoboForex

          Sincerely,
          RoboForex team

          Comment


          • The most important events of the financial world in 2020

            Author: Server Ametov


            And here are the results of the year, friends! We honestly warned you about them in the previous article. So take a few minutes off your prayers for an early end to 2020 and check out our selection of events that we think were the most significant.

            1. COVID-19 pandemic and quarantine (surprised, huh?)

            Perhaps there is no more annoying and painful topic than this one. However, in 2020, the whole world was forced to play by cruel rules dictated by the coronavirus infection. As of this writing, 82 million disease cases were recorded worldwide, 46.3 million recovery cases, and 1.79 million deaths.

            In late February - early March, the stock market crashed. These were the worst trading weeks since the 2007-2008 financial crisis. March 9 has already gone down in the history of exchanges as "Black Monday," March 12 - as "Black Thursday." No one even tried to name all the following days of an inconsolable and uncompromising fall.

            The indices reached the bottom on March 18-23. Let's compare the indicators of those days with the statistics of the beginning of the year. The picture emerges as follows: the Dow Jones Industrial Average sank 35.6%, the S&P 500 by 31.3%, the Nasdaq 100 by 21.2%, the Stoxx Europe 600 by 33, 7%, Kospi - 31.8%, Shanghai Composite - 13.4%, Hang Seng - 24%, Nikkei 225 - 28.7%, S&P/ASX 200 - 32%.

            COVID-19 and quarantine measures have hit such sectors of the global economy as air, land, sea passenger and cargo transportation, hotel and spa business, entertainment, oil, and heavy industry.

            But we can call the technology sector the primary beneficiary of the pandemic. The best proof of this will be the growth statistics of IT companies quotes. Since the beginning of the year, Apple has risen in price by 85%, and its capitalization has reached $ 2.3 trillion, Amazon grew by 79.9%, Microsoft by 42.2%, Facebook by 35.4%, and Alphabet by 31.2%.

            We also wanted to note the growth of shares of Zoom Video Communications by 430% and Netflix by 64.2%. As of this writing, companies' capitalization was $ 101.2 billion and $ 234.5 billion, respectively. So much for the delights of quarantine and working remotely.

            2. Antitrust hearings

            Since we have already touched upon the largest representatives of the technology sector, it is fair to say that not everything went smoothly for them in 2020. The primary headache was lawsuits and antitrust investigations.

            Only Alphabet, Google's parent company, was sued three times during the year. On October 20, the US Department of Justice and 11 states accused the IT giant of creating a monopoly on the browser market. Plaintiffs are seeking the sale of Chrome. On December 16, 10 states accused Google of monopolizing the online advertising market. On December 17, 38 states went to court, accusing the corporation of a monopoly in an online search.

            Facebook is also involved in one of the lawsuits listed above. Prosecutors allege that Mark Zuckerberg's company entered into an illegal conspiracy with Alphabet. The social network already lacked litigation. On December 9, the US Federal Trade Commission, along with 46 states, accused Facebook of suppressing fair competition and insist on selling Instagram and WhatsApp.

            Read more at R Blog - RoboForex

            Sincerely,
            RoboForex team

            Comment


            • How to trade stocks in 2021. Beginners Guide

              Author: Timofey Zuev


              To start trading stocks, you need your main instrument – a trading account. You can open it either at a broker or bank. However, how do you choose the right and reliable company if you’re completely new to the market?

              We’ve made a checklist for you.

              Checklist for choosing a broker

              1. Make sure that the financial organization is licensed. You can easily find all the documents on the official website of the company.

              2. Check for how long a company has been operating on the market. No secret that the longer this period, the more reliable a company becomes. Choose brokers that are at least 5 or, even better, 10 years “old”.

              3. Check the trading conditions. You are interested in the following:
              • Commission fees for money depositing and withdrawal: whether they are high or low.
              • Fees for trading stocks – of course, the lower, the better.
              • The number and types of available instruments: if a broker allows trading premium-class stocks only, such as Tesla or Google, you might simply be short of money to invest in them. Diversity is the key here.
              How to define the amount of investments?

              https://blog.roboforex.com/wp-content/uploads/2020/12/shutterstock_1069297679.jpg

              Now you need to decide how much you are investing in stocks.

              On one hand, the answer to this question looks simple: invest as much as you can afford to lose. This is the most rational approach.

              The larger your investment – the higher your potential profit, but the greater your risks. There’s no magic number that is suitable for all the traders in the world.

              Also, account for the volume of your investment (or, how many stocks you buy) and the price of one asset (meaning the price of 1 stock). Moreover, note that some brokers set a minimum investment for trading stocks which can be practically any sum they want.

              Read more at R Blog - RoboForex

              Sincerely,
              RoboForex team

              Comment


              • RoboForex: changes in trading schedule (Martin Luther King Jr. Day)


                We’re informing you that due to the public holiday in the USA, Martin Luther King Jr. Day, on January 18th, 2021, several instruments will be traded according to the changed schedule*.

                MetaTrader 4 / MetaTrader 5 platforms

                Trading schedule on CFDs on US indices (US30Cash, US500Cash, USTECHCash) and Japanese index JP225Cash
                • January 18th, 2021 – trading stops at 7:45 PM server time.
                • January 19th, 2021 – trading starts as usual.
                Trading schedule on Metals (XAUUSD, XAGUSD) and CFDs on oil (Brent, WTI)
                • January 18th, 2021 – trading stops at 7:45 PM server time.
                • January 19th, 2021 – trading starts as usual.
                Trading schedule on CFDs on US stocks
                • January 18th, 2021 - no trading.
                • January 19th, 2021 - trading starts as usual.

                R Trader platform

                Trading schedule on US stocks, CFDs on US stocks, and ETFs
                • January 18th, 2021 - no trading.
                • January 19th, 2021 - trading starts as usual.
                Trading schedule on CFDs on US indices (US500, US30, NAS100)
                • January 18th, 2021 - no trading.
                • January 19th, 2021 - trading starts as usual.
                Trading schedule on Metals (XAUUSD, XAGUSD) and CFDs on Crude Oil (BRENT.oil, WTI.oil)
                • January 18th, 2021 - no trading.
                • January 19th, 2021 - trading starts as usual.

                cTrader platform

                Trading schedule on Metals (XAUUSD, XAGUSD)
                • January 18th, 2021 – trading stops at 7:45 PM server time.
                • January 19th, 2021 – trading starts as usual.
                Please, take into account these changes in the schedule when planning your trading activities.

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

                Sincerely,
                RoboForex team

                Comment


                • How to Trade by Puria Method Strategy?

                  Author: Victor Gryazin


                  In this overview, we will discuss an indicator strategy known as the Puria method. Regardless of such a mysterious name, this is quite a simple and understandable strategy based on signals from four standard indicators.

                  What is the Puria strategy based on?

                  Puria is an intraday indicator strategy aimed at buying/selling currency pairs during a trading day. In other words, it is meant for making small but regular profits. Each trade opened by the trading strategy is aimed at earning 15-25 points.

                  The trades are first and foremost based on finding a crossing of three Moving Averages. Two slow Weighted MAs (red ones) with periods 75 and 85 are sometimes crossed by a yellow signal EMA with period 5. Trades are opened in the direction of the crossing, an additional filter for signal confirmation being the MACD (15, 26, 1).

                  This strategy does not imply using tech analysis, it is based solely on signals from indicators. You can use any currency pairs and their cross rates; what will depend on your instrument is just the size of your profit. Timeframes recommended for trading are M30 and H1, though some traders try M15 as well. Anyway, this is a good strategy for indicator intraday trading.

                  Signal to buy
                  • The price chart rises above the slow MAs.
                  • The fast yellow EMA (5) crosses its red counterparts from below.
                  • The MACD histogram crosses the central line from below. At least one bar of the histogram must close above zero.
                  • Open a buying position with the SL and TP set according to the recommendations above.

                  https://blog.roboforex.com/wp-content/uploads/2021/01/puria-buy-1001x630.png

                  Closing thoughts

                  The Puria Method Strategy is an easy way to trade intraday using signals from four indicators. However, keep in mind that no matter how profitable the strategy promises to be, market conditions are prone to change, so a positive result is never guaranteed. Before trading for real, test the Puria strategy on a demo account and make sure it is efficient for the current market conditions.

                  Read more at R Blog - RoboForex

                  Sincerely,
                  RoboForex team

                  Comment


                  • How to calculate Return on Equity (ROE)?

                    Author: Victor Gryazin


                    In this article, we’ll talk about the Return on Equity (ROE), one of the key indicators of investment returns, which helps to assess the financial stability and investment attractiveness of different companies.

                    What is the ROE for?

                    https://blog.roboforex.com/wp-content/uploads/2021/01/roe1.jpg

                    The Return on Equity is an indicator that assesses how effective the funds invested by companies’ shareholders are. As a matter of fact, the ROE is the company’s annual profit after taxes, fees, and other statutory expenses, divided by the cost of all funds invested by its founders and shareholders without borrowed money.

                    As a rule, investors prefer companies and firms with a higher ROE. However, profits and incomes in different sectors of the economy vary a lot. For example, the indicator may differ even within the same sector if a company decides to pay dividends instead of keeping profits as available cash assets.

                    It’s important to assess the ROE in real-time mode, for a particular period of time (for example, 5 years). Investors usually calculate the ROE at the beginning and the end of their investment period, so that they could see real changes in profitability. This method gives the opportunity to assess the growth dynamics and compare the results with other companies’ performance.

                    A stable and eventually growing ROE attract investors. The ROE growth means that the chosen company is reliable and can produce stable income because it knows how to wisely employ its capital in order to increase performance and profits. On the other hand, the ROE decline may indicate that the company’s management makes wrong decisions and invests money in non-profitable assets.

                    Example of the ROE calculation

                    https://blog.roboforex.com/wp-content/uploads/2021/01/roe2.jpg

                    For example, the company’s net income at year-end is $100,000$. At the same time, the average shareholders’ equity consists of 50,000 shares worth $5 each. In this case, the ROE will be calculated as follows:

                    ROE = 100,000 / 50,000 * 5 * 100% = 40%

                    It’s a high ROE, which says that the company is actively developing. For a more detailed estimate, it will be better to analyze the average ROE dynamics over 3-5 years – it will provide a fair insight into the company’s prospects.

                    However, one should remember that even if the OE is growing, the company’s profit is not necessarily paid to investors. If the company decides to keep its profits without paying dividends, shareholders may get profit only indirectly, due to the rise of the company’s share price.

                    Read more at R Blog - RoboForex

                    Sincerely,
                    RoboForex team

                    Comment

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