Announcement

Collapse
No announcement yet.

RoboForex - Forex Broker: overview and news

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Vlad RF
    replied
    RoboForex received two major awards in two nominations

    Our team is constantly working on improving investment solutions and trading platforms to provide the company’s clients with the most comfortable conditions available in financial markets. We are therefore proud to be, once again, highly appreciated by the professional community of the industry.

    RoboForex received two prestigious awards

    The R StocksTrader platform developed by RoboForex was recognised as the "Best Multi Asset Trading Platform (LatAm)" according to the Global Banking & Finance Awards. Moreover, our investment platform CopyFX received the "Best Investment Products (Global)" award from the Global Brands Magazine Awards.


    Trade in R StocksTrader
    Best Multi Asset Trading Platform (LatAm)

    The R StocksTrader platform satisfies the requirements and demands of the most sophisticated investors.
    • Easy start
      Start investing with just 100 USD.
    • 12,000+ instruments
      US Stocks, Forex, ETFs, CFDs on stocks, and other popular exchange-traded and OTC assets.
    • Best trading solution
      Unique platform with personal customization and a wide range of trading opportunities, algorithmic strategy builder.

    https://i.postimg.cc/XYHCr0Pr/2022-09-29-13-31-42.png

    Invest in Top Traders with CopyFX
    Best Investment Products (Global)

    The company's clients can copy successful traders’ transactions with competitive conditions on the CopyFX platform.
    • Thousands of participants
      Join a huge community of Traders and Investors.
    • Multifunctional control
      Control every stage of your investments and allocation of funds.
    • A wide range of platforms
      Trade via the most popular terminals MetaTrader 4/5, as well as via the exclusive multi-asset R StocksTrader platform.


    Sincerely,
    RoboForex team

    Leave a comment:


  • RF roboforex
    replied
    Dear traders!

    This week, the RoboForex company's project called ContestFX offers you the following competitions:

    The 138th competition of "Demo Forex" is reaching its end.
    The 380th competition of "Week with CFD" has started today.
    At 12:00, 28 September 2022, starts the 514th competition of "Trade Day".
    At 20:00, 29 September 2022, starts the 428th competition of "KingSize MT5".

    No complicated actions are required for participation in our contests - you need to go through a simple procedure for registering an account on our website, after which you'll get access to any of the competitions you like in just a couple of mouse clicks.

    We are waiting for everyone to register and wish you good luck!

    Sincerely,
    RoboForex Contest

    Leave a comment:


  • Vlad RF
    replied
    Basic Finance Terms That Beginners Need to Know

    Author:Victor Gryazin

    In this review, we will discuss wide-spread finance terms that will be useful for new-comers to financial markets.

    Financial terms

    Assets

    Financial assets are a specific non-physical form of property (something that a person or company owns) that is supposed to generate a profit. Such assets include bank deposits, stocks, bonds, cryptocurrencies, etc. Financial assets are more liquid than other types of assets.

    Liquidity

    Liquidity is a characteristic of how fast and easily a financial asset can be turned into money without significant losses of its cost.

    Bull market

    Bull market is a state of the market in which asset prices are growing, and market participants are optimistic.

    Correlation

    Correlation in finance is a statistical measure that shows the relationship between two assets. In other words, correlation is the ability of one asset to move in accordance with the movements of another asset.

    Interest rate

    Interest rate is the minimum interest under which the Central Bank of a certain company gives loans to commercial banks. The dynamics of currency markets are seriously influenced by changes in interest rates made by the leading Central Banks. These changes are an indirect reaction to other economic indicators and can provoke fast and strong movements in the currency markets.

    Leverage

    Leverage is the ratio of the loaned capital to the capital owned by the trader. The higher the leverage, the more money is used in trading, which increases potential profits and losses.

    Margin Call

    Margin Call happens when the broker requires to additionally deposit the trader’s account when the amount of money on it reaches some critical level. Margin Call and the trading account margin are a protective mechanism that controls the level of the trader’s money on the account and limits the broker’s risks.

    Netting

    Netting is an accounting system that allows for just one open position in one direction. The trader may not simultaneously open a buying and selling trade by one instrument; if they do, positions get mutually closed. Orders opened in one direction, however, are summed up.

    Hedging

    Hedging financial risks means making professional use of financial instruments or market strategies to compensate for any unwanted price movements. This accounting system allows for any number of open positions in different directions for one instrument.

    Profit

    In trading, profit is the net profit made on a trading operation or an investment. In other words, profit is earnings minus all expenses.

    Quantitative Easing

    QE is an instrument used by Central Banks for adding money directly to the country’s economy that needs to be livened up and freed from crisis. QE does not imply printing a lot of new physical money – the process goes by creating non-cash funds. The funds are spent on buying bonds in the private sector, also known as purchase of government debt. All these actions bring down the yield of state bonds and increase the overall quantity of money in the economy.

    Volatility

    Volatility is the range in which the price of a financial instrument changes over time (day, week, month, etc.). To put it simply, volatility shows how much the price of a financial instrument may grow or fall over time.

    Closing thoughts

    In this review, we have discussed several common terms used in financial markets. They are well-known by experienced traders and investors, and market beginners can use them to increase their erudition and professionalism and to enhance understanding of how financial markets function.

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Leave a comment:


  • RF roboforex
    replied
    Dear traders!

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

    The 138th competition of "Demo Forex" has crossed its "Equator".
    The 379th competition of "Week with CFD" has just started.
    The 513th competition of "Trade Day" will start on 21.09.2022 at 12:00.
    The 427th competition of "KingSize MT5" will start on 22.09.2022 at 20:00.

    Let us remind you that winners of our demo contests receive prize funds to their real accounts, and they can use them to perform trading operations on the Forex market.

    Good luck to all traders!

    Sincerely,
    RoboForex Contest

    Leave a comment:


  • Vlad RF
    replied
    How to Use Margin Calculator on Forex

    Author: Victor Gryazin

    This article is devoted to margin on the Forex market: what it is necessary for, where to find it, and how to use a special calculator for margin on Forex.

    What is margin

    This term has several meanings. In business, margin is profit in percent minus expenses. In trading it means the money that an investor must deposit to the account of their broker or exchange to cover for credit risks.

    Margin on Forex is finance used y a broker to cover for credit risks. Its size depends on the contract and leverage. In other words, margin is a necessary deposit for opening sustaining a position that allows for making trades with leverage for a larger sum than the trader has.

    Margin crediting is provided by brokers so that traders with modest deposits could open substantial positions on Forex. Every broker has their own marginal requirements, and this issue should be cleared before the trader starts working with margin.

    The idea of margin trading on Forex is that cash is not supplied factually. Trading implies making a profit on growth or falling of a currency pair. All trades in margin trading are two-sided: if a contact opens for buying, it is closed with a sale, and vice versa. As a result, the trader either makes a profit or suffers a loss.

    Formula for calculating margin

    The formula for calculating margin necessary for opening a position looks as follows:

    Required margin = [(Base currency) / (Account currency)] * Position volume / Leverage

    Where:
    • Base currency is the currency of the trading operation; it is number one in the abbreviation of the currency pair.
    • Account currency is the currency of the trader’s account.
    • Position volume is the volume of the trading position in the base currency.
    • Leverage is the size of the leverage used.

    Example of calculating margin by formula

    Imagine a trader needs to know what margin they need in USD to open a position sized 0.5 lot in GBP/USD with leverage 1:100.

    The current GBP/USD quote is 1.15 USD, which means the ratio of the base currency GBP to the account currency USD is 1.15. A standard lot on Forex is 100,000 units of the base currency.

    Let us use the formula:

    1.15 * 100000 * 0.5 / 100 = 575

    This means that to open such a position the trader needs 575 USD on their account.

    How to use margin calculator

    All calculations of margin have long become automatic, which means the trader does not need to manually count it by the formula. There is a useful and comfortable instrument for it called margin calculator.

    This universal instrument is also known as trading calculator, Forex margin calculator, and leverage calculator. It will be useful for market beginners and experts alike.

    With this instrument traders can calculate parameters of trades online and choose the most efficient strategies before opening a position. As an example let us take a look at the Trading Calculator by RoboForex that can be found on the official website.

    https://blog.roboforex.com/wp-content/uploads/2022/09/TradingCalculator-1.png

    The calculator has four main input parameters:
    • Ticker of the currency pair
    • Lot size
    • Leverage size
    • Account currency
    After the trader fills in the boxes and clicks Calculate, they get detailed information about the planned trade (according to the account type):
    • Size of the margin required for opening the position
    • Cost of changing 1 point of quotes by the position
    • Spread size (the difference between the buy and sell prices)
    • Swop (rollover) size for long and short positions – the sum that is deposited/withdrawn for transferring the position to the next trading day
    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Leave a comment:


  • Vlad RF
    replied
    What You Need to Know to Make Money on the Stock Market?

    Author: Andrey Goilov

    Financial markets are a completely different world. If one manages to get comfortable here and learn how to choose instruments to invest in, then in the future they can get access to the things that all people strive for – freedom, independence, and a chance to work for themselves. However, in order to achieve and get all of this, one must learn a lot and work hard on themselves and their emotions. When trading on the stock market, it is possible both to earn good money and lose some of your own funds in case of wrong choice of companies.

    Why do I need to invest?

    Unfortunately, if your money doesn’t work and just lies in a jar, it takes a beating because of the high inflation. If we invest money in a bank, in most cases the interests we receive barely cover the inflation, while the fall in your national currency exchange rate may put even such seemingly reliable ways of saving money in jeopardy. The real estate market is not always attractive as well.

    https://blog.roboforex.com/wp-content/uploads/2019/12/1.jpg

    As a matter of fact, the stock market is one of the most promising ways to get profit provided that you have seed money. This factor is very clearly described in a movie called “Limitless”. The main character takes a new nootropic, which makes his brains extremely powerful. Using these abilities, the character earns a pile of money in a very short period of time. and the stock market is exactly the place where he accomplishes it.

    Where to start?

    Nowadays, people trade online, that’s why the first thing you need is internet access.
    1. Decide on the investment amount. It’s very important not to risk big sums of money, loss of which may radically change your life. Another thing is that one should not trade with borrowed funds. Many authors from Europe and the USA recommend to start trade with the sum you won’t regret to lose.
    2. Choose a broker to buy and sell stocks through. A good article How to Choose a Forex Broker was earlier published in our blog.
    3. Choose a trading strategy. The method you choose will tell you what stocks to buy or, like professional traders and investors say, provide signals for buying and selling financial instruments. For example, one can try strategies for beginners based on Moving Averages. It’s a simple but at the same time efficient tool for analyzing stocks; an important advantage here is trading towards the primary trend.

    Mistakes that beginners make

    There is an opinion that in order to become a real trader and get permanent income on the stock market, one must gain experience that will help to avoid making mistakes in the future. Needless to say, that in the early going traders tend to “go to pieces” and take on real risk. Experienced authors can recommend something here as well.
    1. Trading towards the primary trend is one of the key rules. If the stock price rises, it is believed that they should be bought, while in case of decline it would be better to get rid of them.
    2. Don’t trade if you don’t see fair opportunities for that. We are recommended to stick to the strategy, which we must choose before starting to trade. If the strategy doesn’t provide signals at the given moment, it makes good sense to patiently wait for such signals and only after that start making decisions whether to buy stocks or not.
    3. Let your profit grow and close your loss-making deals. If the stock price rises and your profit increases with each day, don’t be in a hurry to sell them – on the contrary, you should wait until your profit goes higher. However, if you see that stocks generate losses instead of profit, it will be wise to sell them in order to avoid more significant losses.
    4. Trade with protective stop orders. Before opening a position, you should in advance set the price, at which the positions will be closed with a loss. Anything can happen on the stock market, that’s why it’s very important to estimate risks you are willing to take.

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Leave a comment:


  • RF roboforex
    replied
    Dear traders!

    This week, RoboForex's project called ContestFX is waiting for everyone to participate in the following contests:

    The 138th competition of "Demo Forex" entered its second week.
    The 378th competition of "Week with CFD" has just kicked off.
    The 512th competition of "Trade Day" will start on 14.09.2022 at 12:00.
    The 426th competition of "KingSize MT5" will start on 15.09.2022 at 20:00.

    It does not take much effort and time to participate in our competitions - all you have to do is to go through a simple registration procedure from your Personal Members Area on our website to get access to any of the contests you like.

    Join us!

    Sincerely,
    RoboForex Contest

    Leave a comment:


  • Vlad RF
    replied
    How Economic Recession Influences Investors' Behaviour

    Author: Victor Gryazin

    This overview describes what economic recession is and why it happens. We will analyse a case of global economic recession and see some advice concerning how to behave during a crisis.

    What is economic recession

    Recession is a serious and lengthy decline of economic activity, characterised by a decrease in production and employment that results in falling of income and spending of households. This phenomenon may last over several months and is usually followed by a decline of the GDP.

    Experts from the US National Bureau of Economic Research (NBER) have given their own definition. They state that recession is a significant economic decline that starts at the high of preceding growth and ends at the low of subsequent falling.

    The decline of economic activity must be quite deep and lengthy to have the right to be called recession. It may last just several months but it will take the economy years to get back to the previous peak.

    Reasons for and signs of economic recession

    Multiple economic theories struggle to explain why and how economy escapes a lengthy uptrend and starts falling. For example, abrupt and stable growth of oil prices due to a geopolitical crisis may lead to growth of spending at the global market and provoke a global economic recession.

    According to the conclusion made by the US Congress Special Commission, the economic recession 2008-2009 was provoked by such factors as mistakes in financial regulations and in corporate management, excessively high debts of households, wide use of high-risk derivatives, and growth of non-regulated shadow banking.

    Spread of COVID-19 in 2020 and quarantine restrictions are yet another example of an economic shock that can provoke recession. It might be just speeding up the process that could be inevitable due to other factors.

    How US recession 2008 influenced global capital markets

    The economic recession and crisis in 2008 followed a lengthy time of growth of housing prices and a boom of mortgaging in the US. The overall economic peak happened in December 2007,and the NBER considers this month the beginning of the recession. At the start, the decline of the economic activity was modest but sped up abruptly in autumn 2008 when stress in financial markets reached the top. The US GDP dropped from +2% to -2.6%, and the unemployment rate grew from 5% to 10%.

    January 2007 through September 2009 large US and European banks lost more than $1 trillion on toxic assets and unsecured loans. A lack of confidence of investors in the paying ability of banks alongside loans becoming less affordable led to an abrupt decline of prices for goods and services. The crisis quickly turned into a global economic shock, making several large banks go bankrupt. Economy worldwide slowed down because crediting became tough and global trade went feeble.

    This recession in the US became the longest one since World War 2 and lasted 18 months. The S&P 500 index started falling at the end of 2007 and, having lost more than 50%, began recovery only in the middle of 2009.

    https://blog.roboforex.com/wp-content/uploads/2022/09/sp500-1536x729.png

    Global economic recession 2022

    These days, the global economy is slowing down abruptly. War in Ukraine, growth of prices for energy carriers and foods alongside imbalance between the demand for them and supply provoke growth of global inflation. According to forecasts of analysts, a decline of the buying ability of households and toughening of the credit and monetary policy will bring down the growth of the US economy up to 2.3% this year and up to 1% in the next year.

    In China, the slow-down of economic development turned out stronger than expected due to COVID-19 breakouts and imposed quarantine measures. In the Euro zone, growth dropped to 2.6% this year and will reach 1.2% next year. According to the forecasts of the IMF, inflation and the geopolitical crisis have already put the global economy on the verge of recession.

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Leave a comment:


  • Vlad RF
    replied
    Trading Like Sperandeo: 1-2-3 Reversal and 2B Pattern

    Author: Victor Gryazin

    In this article, we will discuss the trading methods of a famous Wall Street trader Victor Sperandeo. A long-time experience of trading on exchanges and managing investments as well as several books on trading have brought Sperandeo the popularity he deserves.

    How to draw a trend line?

    According to the definition from tech analysis, a trend is a period when the price is moving mostly in one direction, either growing or declining. In other words, a trend is a price movement in one direction. A trend can be explained by economic, political factors or force majeure events.

    Sperandeo singles out three types of a trend in terms of its length; they can be active simultaneously and move in opposite directions:
    • Short-term trend lasts from several days to several weeks, 14 work days on average
    • Mid-term trend lasts from several weeks to several months
    • Long-term trend lasts from several months to several years.
    Any of this trends can be traded; traders usually aim at short- and mid-term trends while investors – on mid- and long-term ones. To trade reversal patterns, we need the market to move in an up- or downtrend.

    An uptrend is a price move in which each next high is higher than the previous one and each next low is also higher than the previous one.
    A downtrend is characterized by each next high and low being lower than the previous one.
    An important aspect of trend analysis is drawing the trendline. When the price breaks out the trendline, it signals the beginning of a correction or a trend reversal. For drawing the trendline, the following rules are used:
    • The trendline in an uptrend is drawn on the chart through 2 points: the first point is the low preceding the absolute high of the trend; the second point is the first low the uptrend has started from. If the trendline crosses the chart, the second point (the farthest low) is transferred to the next closer low for the trendline not to cross the price chart.

    https://blog.roboforex.com/wp-content/uploads/2020/02/sperandeo-trendline-uptrend-1046x630.png

    Trend reversal 1-2-3

    The rule of Sperandeo trend reversal 1-2-3 comes into force when the price chart breaks out the trendline. This is the first signal of a possible trend reversal, which may precede a 1-2-3 reversal. Below, we will discuss in detail the rules of formation of this reversal and trading it in an up- and downtrend.

    A 1-2-3 reversal in an uptrend
    • Find an actual uptrend on the price chart and draw a trendline.
    • After the trendline is broken out, name the high preceding the breakout as point 1 and the low formed after the breakout – point 2.
    • After point 2 is formed, a new ascending impulse in the direction of the trend forms. A short-term exceeding of point 1 is possible (it is called a false breakout) – it must be followed by a strong pullback down. The new high is named point 3.
    • The 1-2-3 reversal comes into force if the price goes further down renewing the low in the point 2. Open an selling position, putting an SL above point 3.

    https://blog.roboforex.com/wp-content/uploads/2020/02/sperandeo-123-uptrend-1049x630.png
    We have described an original conservative way of trading a 1-2-3 reversal by Victor Sperandeo. Sometimes, I use a more aggressive way of trading – I trade right after point 3 is formed. The signal might be a false breakaway or some Price Action reversal pattern. This is less trustworthy because the reversal has not been confirmed yet (point 2 has no been broken out) but this method allows to enter the market with a smaller SL and a more profitable profit to loss ratio.

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Leave a comment:


  • RF roboforex
    replied
    Dear traders!

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

    The 138th competition of "Demo Forex" and the 377th competition of "Week with CFD" have just started.
    The 416th competition of "Trade Day" will start on 07.09.2022 at 12:00.
    The 425th competition of "KingSize MT5" will start on 08.09.2022 at 20:00.

    All winners of our contests receive prize money to their real accounts using which they can perform trading operations on the Forex market without investing their own financial savings.

    Don't miss your chance to be one of them!

    Sincerely,
    RoboForex Contest

    Leave a comment:


  • Vlad RF
    replied
    RoboForex: upcoming changes to the trading schedule in view of the Labor Day

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

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

    MetaTrader 4 / MetaTrader 5 platforms

    Schedule for trading on US indices (US30Cash, US500Cash, and USTECHCash) and the Japanese index J225Cash
    • 5 September 2022 – trading stops at 7:45 PM server time.
    • 6 September 2022 – trading starts as usual.
    Schedule for trading on Metals (XAUUSD and XAGUSD) and CFDs on oil (Brent and WTI)
    • 5 September 2022 – trading stops at 7:45 PM server time.
    • 6 September 2022 – trading starts as usual.
    Schedule for trading on CFDs on US stocks
    • 5 September 2022 – no trading.
    • 6 September 2022 – trading starts as usual.

    R StocksTrader platform

    Schedule for trading on US stocks and ETFs
    • 5 September 2022 – no trading.
    • 6 September 2022 – trading starts as usual.
    Schedule for trading on CFDs on US stocks and ETFs
    • 5 September 2022 – no trading.
    • 6 September 2022 – trading starts as usual.
    Schedule for trading on CFDs on US indices (US500, US30, and NAS100) and the Japanese index JPY225
    • 5 September 2022 – trading stops at 7:45 PM server time.
    • 6 September 2022 – trading starts as usual.
    Schedule for trading on Metals (XAUUSD and XAGUSD) and CFDs on oil (WTI.oil, BRENT.oil)
    • 5 September 2022 – trading stops at 7:45 PM server time.
    • 6 September 2022 – trading starts as usual.

    cTrader platform

    Schedule for trading on Metals (XAUUSD and XAGUSD)
    • 5 September 2022 – trading stops at 7:45 PM server time.
    • 6 September 2022 – trading starts as usual.
    Please take note of the above trading schedule changes when planning your trading activity.

    Sincerely,
    RoboForex team

    Leave a comment:


  • Vlad RF
    replied
    How to Trade by Antitrend Strategy

    Author: Andrey Goilov

    Not all traders like to trade the trend: there are deep corrections able to kick even a most patient investor out of the market. When trading against the trend, the results of a trade take much less time to wait for. And if the trader masters catching reversals, risks will also be small.

    https://blog.roboforex.com/wp-content/uploads/2022/08/Pic-1-1.png

    A trading strategy called the Antitrend strategy allows looking for such signals in stock indices. For successful work, only one indicator is needed, set up especially for the DAX index, the most important stock index in Germany.

    The article explains how to trade with the Bulls Power indicator, what peculiarities selling and buying trades have, and how Stop Loss and Take Profit can be placed.

    What Antitrend strategy is like

    By the Antitrend strategy, trading occurs on H4. Signals will be few but quite noticeable – on smaller timeframes, the number of false signals is overwhelming.

    The strategy is based on using a not-so-popular indicator Bulls Power with a standard period. The instrument calculated the difference between an Exponential Moving Average with period 13 and the high of the price.

    https://blog.roboforex.com/wp-content/uploads/2022/08/Pic-2-1.png

    If the trend is bullish, the bars of the indicator are above zero, growing. This means buyers are strong, they have enough power to renew highs. And if the trend is bearish, indicator values drop below zero and are declining, demonstrating bearish pressure.

    It is recommended to enter a trade only when Bulls Power reaches certain levels. For buying and selling, these levels are different. This tactics is applicable to all global indices but the levels are designed for the DAX index.

    Closing thoughts

    The Antitrend strategy is meant for trading the DAX stock index at strong impulses on an H4 chart. Signals will be few because levels for the Bulls Power indicator are extreme, and the timeframe is large.

    However, this is more like an advantage for traders who do not want to enter the market frequently: they will be free of spending a lot of time before charts, constantly analysing price movements.

    The rules for the strategy are extremely simple, and risk management is efficient because the profit-to-risk ratio is 3 to 1. Hence, such tactics can be used as an option for additional earnings.

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Leave a comment:


  • RF roboforex
    replied
    Dear traders!

    This week, RoboForex's project called ContestFX invites you to the following competitions:

    The 137th competition of "Demo Forex" has entered the final phase.
    The 376th competition of "Week with CFD" has just started.
    The 510th competition of "Trade Day" will start on 31.08.2022 at 12:00.
    The 424th competition of "KingSize MT5" will start on 01.09.2022 at 20:00.

    If you've never taken part in our contests before, trust me, it's easy to do it: go through a simple registration procedure, and get access to any of the competitions you like in just a couple of mouse clicks

    Join us, it won't be boring!

    Sincerely,
    RoboForex Contest

    Leave a comment:


  • Vlad RF
    replied
    How to Use Dow Theory in Technical Analysis

    Author: Andrey Goilov

    There is an opinion that modern tech analysis is based on the Dow theory, and today we will speak about this unique Charles Dow’s theory that still remains quite efficient. Also, we will discuss how this approach can be used in trading.

    What is Dow theory

    A series of Dow’s articles in the Wall Street Journal helped William P. Hamilton, Robert Rhea, and George Schaefer design a market research theory.

    The Dow theory is an approach to trading based on six principles. The main focus is on price highs and lows that help detect the current trend. Also, each outer factor, such as news or random events, is supposed to be already incorporated in the price. The Dow theory in technical analysis remains topical these days as well.

    Initially, the principles were used for the railway and industrial indices only that were included in the Dow Jones Industrial Average. However, some research proves the efficacy of the principles for the stock market as well.

    For example, Martin Pring in his book Technical Analysis Explained wrote that the stocks from the Dow Jones index bought in 1987 for 44 USD could have yielded about 2,500 USD of profit if sold in 1990.

    Charles Dow theory principles

    As said above, the whole of the Dow theory is based on six principles. Let us take a look at each of them in a more detail.

    Market cares for everything

    All events and factors have already been taken account of by the market and included in the price. Absolutely any event that might happen, even a disaster or an earthquake, is valid. The principle is also known as “Market depreciates everything”.

    For example, if a company is getting ready to present a great report, the market is likely to account for it even before the report appears. In other words, the demand for the shares of the company will grow in advance, and after the report is published, the growth might stop.
    Moreover, the quotes might fall when a strong report is published because the report might turn not as great as expected

    There are three types of trend

    Charles Dow defined the trend but never made a focus on uptrends, downtrends, and flats as in classical tech analysis. Nonetheless, his definition of the trend remains efficient. It says that in an uptrend, each next high and low is higher than the previous one. In this principle of the Dow theory the length of trends is estimated:
    • A primary trend lasts for longer than a year, sometimes for several years. It is supposed that the main mass of investors in the stock market looks for a primary trend chiefly.
    • A secondary trend, a.k.a. intermediate trend, lasts from three weeks to three months. It might reach up to 50% of correction of the primary trend.
    • A small trend lasts for no more than three weeks. It consists of minor fluctuations inside a secondary trend. In modern trading, it is mostly called a short-term trend.
    Dow theory in technical analysis

    Charles Dow theory is quite easy to adapt to modern markets. Jesse Livermore said that markets are moved by the psychology of market players. Though there have appeared new markets, psychology has never changed; hence, the patterns and laws discovered by Charles Dow on charts will be working in the future as well.

    What do you think about the Dow theory plus Forex? Indeed, these days it is used in Forex as well. For example, we trade the trend and combine different timeframes for signal search.

    Trend reversals that appear when the price cannot renew the previous high often lead to the appearance of such patterns as the Head and Shoulders and Double Top.

    And if we trade a bullish trend, some traders who use tech analysis think that one should buy when the price breaks through a high or nears the preceding low. If the trend is strong, a breakaway of the high can push the price further up and will not let the price fall below the previous low.

    There might be no direct correlation between the Dow theory and Forex, but most often the ideas of price behaviour described above coincide with the analysis practises by modern traders. With graphic patterns, forecasts by the Dow theory can be made.

    Read more at R Blog - RoboForex

    Sincerely,
    RoboForex team

    Leave a comment:


  • Vlad RF
    replied
    RoboForex: important information in view of Tesla's stock split on 25 August 2022

    On 25 August 2022, Tesla will have its stocks go through a split. A stock split is a corporate action, as a result of which the company increases the number of issued shares by a specific multiplier and reduces the value of each share by the same multiplier.

    Tesla will conduct a 3-for-1 stock split (1 share will be split into 3).
    How will this affect positions and orders?

    If you have open positions in Tesla shares or plan to open such positions, please pay attention to the following changes, which will be effective as of 25 August 2022:

    MetaTrader 4 / MetaTrader 5 accounts

    The split procedure will take place on 25 August and will be completed prior to the US Stock session's start at 16:30 (server time).
    • All pending orders (Buy Limit, Buy Stop, Sell Limit, Sell Stop, Buy Stop Limit, Sell Stop Limit, Stop Loss, and Take Profit) in TSLA will be cancelled.
    • For positions in TSLA, the opening price will be divided by 3.
    • The volume of each open position in TSLA will be multiplied by 3.

    Please note that if you are using an Expert Advisor (EA), we suggest that you check with its developers whether its code needs any modifications to ensure the correct interpretation of the price data after the stock split.

    R StocksTrader accounts

    The split procedure will take place on 25 August and will be completed prior to the US Stock session's start at 16:30 (server time).
    • During the split procedure, all active pending orders (Buy Limit, Sell Limit, Stop Loss, and Take Profit) in TSLA (CFD) and TSLA.nq will be cancelled.
    • For positions in TSLA (CFD) and TSLA.nq opened before the split, the opening price will be divided by 3.
    • The volume of all open positions in TSLA (CFD) and TSLA.nq will be multiplied by 3.
    • All positions in any of these instruments in the same direction and on the same account will be combined into one new position. This new position will have the opening price and a volume based on an average weighted price of all positions held before the split.

    The historical charts in your trading terminal will be updated to reflect the new prices of the above-mentioned instruments.

    All other aspects of trading conditions shall remain intact. Please take this information into account when planning your trading activity.

    Sincerely,
    RoboForex team

    Leave a comment:

Working...
X