How to Trade Linear Regression Indicator
Author: Andrey Goilov
The Linear Regression Indicator was designed and presented by Gilbert Raff. It happened quite recently, in the 1990s. So, this instrument can be called a rather new one as long as the majority of indicators have been created in the 1970s.
The Linear Regression Indicator, or LRI, consists of three lines. These lines show the high, medium, and low of the current price movement, forming a price channel. The upper and lower borders of the channel demonstrate the extremes to which the price has deviated from the middle line.
https://blog.roboforex.com/wp-content/uploads/2021/10/Pic-1.png
You can see that the indicator somewhat resembles the Bollinger Bands, which consists of a floating channel on the chart that is from time to time broken through by the price up or downwards, after which the price returns to the medium level.
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Regardless of the fancy name, the LRI is quite simple to use.
What is the essence of the LRI?
As I have already mentioned, the Linear Regression Indicator consists of three lines.
First, the middle line is drawn based on the price levels; it is also known as the trend regression line.
The indicator adds two lines to the first one at equal distances from it. Traders say those are quality support and resistance levels, between which the price will be going for some time.
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How to Filter Stochastic Signals?
Author: Andrey Goilov
We already have two articles about the Stochastic Oscillator describing in detail the indicator itself and the ways of trading by it. This is an oscillator, i.e. it demonstrates how much the price has fluctuated from the average; it works great in flats.
If there is a strong, directed trend, such an indicator will give a lot of reversal signals, making the trader buy in the falling market and sell in the growing one. Hence, traders do not normally use Stochastic by itself: instead, they add other signals to it, enhancing the work of the indicator significantly.
Today, I will try to step beyond the boundaries of normal trading by the instrument and show you how to filter its signals in order to make money on lengthy trends.
Some history
The necessity to track indices appeared as early as the 20th century. In 1925, at the International Conference of Labor Statisticians, certain rules of data collection, processing, generalizing, and presenting were adopted. The importance of such information was acknowledged by all the participants of the conference.
Also, at the Conference, a universal approach to planning and regulating price policies of countries was worked out. Practically, these were the first steps towards globalizing international markets.
The standards created that time were revised three times later: in 1947, 1962, and 1987. In 1962, at the tenth Conference, the term PPI was finally adopted. This is exactly the term used today.
Moving Average
I guess, the best way to improve signals from Stochastic is to add a Moving Average to it or several such lines. This combination lets the trader work by the current trend.
https://blog.roboforex.com/wp-content/uploads/2021/09/Pic-1-1.png
For trading, an H4 or H1 chart of any currency pair will be good. Add an MA with period 75: if the price is above the line, we look for a signal to buy from Stochastic. If the price breaks through the MA downwards, the trader needs a signal to sell from Stochastic.
A signal to buy
Let us have a look at an example with EUR/JPY. We see the price go above the MA(75), indicating an uptrend. In this case, we are not interested in signals to sell, because the Stochastic values may stay above 80 for a long time and quite often perform crossings for sale. Such signals must be ignored.
https://blog.roboforex.com/wp-content/uploads/2021/09/Pic-2-1.png
The best signal will be a decline of the Stochastic values below 20 and crossing of this area. In the marked area, there were two such signals, and both times the market kept growing.
A Stop Loss in such a case must be placed 35-55 points away from the MA. As for a Take Profit, place it at least at the local high because the trend is ascending, and the price will easily renew it.
However, if the price breaks through the MA downwards and the signal lines of Stochastic cross in favor of buying, wait for the price to get above the MA again and buy with the same risk of 35-55 points away from the MA.
Bottom line
The Stochastic Oscillator gives too frequent entry and exit signals by the crossings of its signal lines. To improve those signals, you can add other indicators, combine Stochastic with graphic patterns, or check for the confirmation of signals on different timeframes.
Adding a Moving Average to the chart alongside Stochastic will let you trade the trend only. If you add a graphic pattern, you will avoid preliminary signals from the pattern itself. Combining various TFs gives you an extra Stochastic signal from a smaller TF.
As you see, there are plenty of trading options with Stochastic. Just test them all on a demo account and always follow your money management rules, especially when you trade real money.
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RoboForex wins prestigious awards in the financial sector
We’ve always tried to maintain the high level of the services we provide and introduce pioneer products. Our efforts were not for nothing – they were recognised with prestigious awards of the financial industry: "Best Investment Products (Global)" at Global Brands Magazine Awards, "Most Trusted Broker – Global" according to International Business Magazine Awards, "Best Multi-Asset Trading Platform (LatAm)" and "Best Prime Trading Account (Asia)" at Global Banking & Finance Awards.
Counting these awards, the total number of titles received by RoboForex has reached 30. However, the most valuable and precious award for us is the trust of our clients and partners, who has been choosing our company for cooperation for 11 years now. We truly appreciate your trust and are very thankful for the choice you made.
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What Is Stock Split and How Does It Influence Stock Price?
Author: Victor Gryazin
This article is devoted to such an idea as a split of stocks, its influence on the stock price and on how attractive they are for investors
What is a stock split
A stock split is an increase in the number of stocks of the issuer in circulation that entails a decrease in the stock price but not in the general capitalization. This is a wide-spread market practice, naturally supported by the company's desire to make their expensive shares more affordable to a wide range of investors.
Many actively developing companies are interested in an in-flow of extra money that new investors can bring. However, not every investor can afford promising and expensive stocks.
Hence, to make stocks cheaper and more affordable, the split procedure is run to. As a result, the number of stocks increases and their price drops proportionally. This makes the stocks more affordable to investors.
For example, if a company increases the number of its shares five times, i.e. carries out a split of 5:1, investors can have 4 extra shares per each they already have.
At the same time, the price of one share decreases proportionally: if initially a share cost $1,000, after the split it will cost $200. Hence, each shareholder of this issuer will have 5 times as many shares but their total price will not change.
Critical points of stock splits
The split coefficient that shows how much the number of stocks changes after the procedure, is normally anything between 2:1 and 10:1. In the split procedure, there are three main dates:- The day of announcement. To get started, the company makes a public announcement of its plans for a stock split and all the details that investors need to know. This information usually includes the split coefficient and the day when the split is to happen.
- Register closing day: this is an important day when the list of the company's shareholders is settled. These people will get extra shares after the split.
- The split day is the day when new stocks appear on the investors' broker accounts and start trading at the new price.
There is another procedure known as the reverse split that also changes the number if stocks in portfolios. It is also called stock consolidation.
By this procedure, the stocks that investors hold are changed by a proportionally smaller number of stocks. For example, a reverse split of 1:3 makes every three shares into one. This means that if you used to hold 30 shares of the company, after a stock consolidation you will have only 10 but the price of each share will grow three times.
For example, if the stocks did horrible, trading low under a dollar, a reversed split can raise their price.
How does a split influence the stocks and investors?
On the whole, a stock split is interpreted as a good event for the issuing company, though it does not influence its capitalization directly. A split means that the company is developing, doing well, and the growth of its shares confirms it. Carrying out a split, the company signals that it wants to make its shares more attractive and affordable to private investors.
A decrease in the price makes the shares more affordable to investors and more liquid. The history of splits shows that the growth of stocks after a split usually exceeds the growth of major stock indices. Hence, after a split, the portfolio of an investor can have a significant profit, if the shares keep growing.
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How to Trade Morning Star and Evening Star?
Author: Maks Artemov
This overview is devoted to two reversal candlestick patterns: Morning Star and Evening Star.
These two are definitely rare visitors to charts, yet they remain quite popular. Like other reversal patterns, the Morning and Evening Stars form at the highs and lows of the price and contain three candlesticks each.
How does a Morning Star form?
This pattern forms at the lows of the price chart. When a descending impulse is going to subside, the price makes a minor surge upwards, so that the candlestick opens and closes with a gap.
Conditions required for the pattern to appear:- A support or resistance level;
- The first candlestick has a long body of the same color that the current trend is – and small shadows.
- The second candlestick opens with a gap, has a small body and short shadows. It may be of the opposite color that the current trend is; in most cases, it has little significance anyway.
- The third candlestick opens with a gap and closes above the opening price. It must be of different color than the first candlestick.
You may place a Take Profit at the nearest resistance level or as 1:4 to the SL.
A Morning Star looks as follows:
https://blog.roboforex.com/wp-content/uploads/2021/09/Morning-Star-1-1198x630.png
How does an Evening Star form?
An Evening Star appears at the highs of the price chart, and its structure is totally opposite to that of the Morning Star.
Conditions required for the pattern to appear:- A support or resistance level
- The first candlestick is ascending; it has a long body of the same color that the current trend is.
- The second candlestick has a small body and opens with a gap. The color of the candlestick is irrelevant.
- The third candlestick also opens with a gap; its color is opposite to that of the first one, and the closing price is below the opening price.
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Best Short-term Strategies: GBP/JPY Range
Author: Andrey Goilov
Trading GBP/JPY might be quite tricky because it is so volatile: its average volatility range exceeds 100 points. However, closer to the Asian trading session the market calms down and sometimes forms a range, pushing the pair out of it by the main trend.
A short-term strategy called GBP/JPY Range uses no indicators; it includes pending orders which shortens your time in front of the terminal. Moreover, working by the strategy, the trader does not choose or forecast the market direction but simply follows the price.
The article is devoted to the idea of this strategy, its trading principles, and to generally checking whether the authors of the strategy have managed to pacify such a volatile pair.
Description of GBP/JPY Range
For trading by the strategy, we use the M15 chart of the GBP/JPY pair. Stick to the closing time of the American and opening time of the Asian sessions. This is 23:00-02:00 terminal time.
Draw horizontal lines through the high and lows of the price in the mentioned timeframe. Then place pending orders for breakaways a bit higher and lower than the drawn levels. If one order gets triggered, delete the second one. If none is triggered over 4 hours, delete both and try again on the next day.
Note that the narrower the corridor, the less it is possible that a strong movement will develop. If the range is quite wide, it is unlikely that the movement will continue after the breakaway. In practice, higher volatility changes for lower, then for higher, and over and over again. It is important that we notice low volatility to catch higher volatility later.
If the channel is wide, volatility is high, hence, there will be no movement after the breakaway. By the rules of the strategy, if the channel is over 70 points wide, you should not trade.
Selling by the GBP/JPY Range
As an example of a selling trade, let us take a breakaway of the channel downwards. We mark the beginning of the channel at 23:00 (11 p.m.); the low of the channel is at 152.74, the high is around 152.86. At 03:00 (3 a.m.) the lower border of the channel was broken, and the price went down. Place a Take Profit at the level of two ranges. This time, the movement was strong and triggered the TP at 152.50.
https://blog.roboforex.com/wp-content/uploads/2021/08/Pic-1.png
In this strategy, we need a Sell Stop pending order as it opens a selling position below the current market price. By the strategy, we must place it 2 points below the low of the range. In our case, it is 152.72.
https://blog.roboforex.com/wp-content/uploads/2021/08/Pic-2.png
Place a Stop Loss behind the high of our range to avoid random price movements against our position. Hence, we place it at 151.95.
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RoboForex: important information relating to the .DE30Cash (GER30) instrument
We’re informing you that the formation principle of the German stock index, which is represented in our platforms as .DE30Cash and GER30, will be changed. Starting from September 20th, it will consist of 40 assets instead of 30 assets earlier.
Changes in MetaTrader 4/5 platforms
On September 18th-19th, .DE30Cash and DE30Cash will be switched to the "Close Only" mode in MetaTrader 4 and MetaTrader 5 platforms. All pending orders in these instruments will be deleted. At the same time, "Stop Loss" and "Take Profit" levels in open positions will remain intact.
If you have open positions in these instruments, you need to close them before December 30th, 2021. All positions that remain open at the end of the trading session on December 30th, 2021, will be closed during the trading session on December 31st, 2021, at the quotes valid at that moment.
Starting from September 20th, 2021, instead of .DE30Cash and DE30Cash, you will be able to trade .DE40Cash and DE40Cash respectively. Please consider this information when planning your trading activity and reconfigure trading algorithms affected by the above-mentioned changes.
Changes in the R StocksTrader platform
In the R StocksTrader platform, the existing instrument, GER30 will be renamed to GER40 on September 18th-19th and it will affect both new and open positions. Starting from September 20th, the instrument will be available for trading as usual.
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NZD/USD in Detail: How to Trade Kiwi Dollar?
Author: Igor Sayadov
NZD/USD: brief history
The full name of NZD is New Zealand dollar (NZ$). Its story began in the 1970-s as a result of talks inside the International Monetary Fund. There were made several decisions about free conversion via a floating rate based on the supply-demand balance in the market
Until 1967, the New Zealand national currency was bound to the British pound and called New Zealand pound. In 1967, New Zealand dollars were first printed and bound to the exchange rate of the USD. In 1973, the floating bind to the American dollar changed for a bind to a basket of the currencies of the main trade partners. However, even such an alteration in dependence did not save the economy of New Zealand from major crises of the 20th century. Nonetheless, NZD/USD is nowadays one of the 8 most popular currency pairs in For example. Among traders, this pair is frequently referred to as Kiwi dollar because this bird is imprinted in a 1 dollar coin. Kiwi is a national symbol of New Zealand.
How to trade NZD/USD in Forex?
You can trade NZD/USD by fundamental analysis, tech analysis, or indicators.
Trading by fundamental analysis
Fundamental factors are:- economic news
- political news influencing the economy
- decisions of the CB on the interest rate.
You can trade short-term on economic news or medium-term on political events and CB decisions on the interest rate. As an example, see attached a D1 at the moment when the interest rate decision was announced on August 20th, 2021.
https://blog.roboforex.com/wp-content/uploads/2021/09/%D1%80%D0%B8%D1%81-1-1200x538.png
The market started growing on August 20th right when the CB announced that it was going to leave the interest rate at 0.25%. At the same time though they promised it would have risen to 0.5% by the end of the year and to 2% by 2024. The market thought of this news as of positive and started buying. As you see, the price grew quite noticeably, which means market players will soon take the profit. Another factor that influenced traders was the growth of quotations in commodity markets.
Closing thoughts
NZD/USD is a major pair that is frequent in the portfolios of most traders. High volatility attracts market players from all over the world. However, to make a profit, you need a good trading strategy that goes by the rules of Forex trading. For signals, you can turn to the standard set of indicators installed to MetaTrader 4 and MetaTrader 5. Try to use at least two indicatore so that the second one confirmed the signals of the first one. Set up the indicators for your trading strategy specifically.
I recommend beginners creating their own trading strategy and testing it on a demo account. If the results are good and stable, start working on a real account.
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Why Is It Time to Invest in China? 3 Promising Companies for Investing
Author: Eugene Savitsky
This overview is devoted to a popular stock index Russell 2000: its contents, its differences from the S&P 500, and ways of trading it.
What is Russell 2000?
The Chinese government would never leave stock market investors in peace. After the market of commercial education was destroyed, which was confirmed by the 90% decline of the share price of New Oriental Education & Technology Group Inc. (NYSE: EDUCATION), TAL Education Group (NYSE: TAL), and Gaotu Techedu Inc. (NYSE: GOTU), any criticism of any sector of business becomes a signal for new tough regulations. For example, a banal article in the state-controlled media, in which online games were compares to "spirit opium" for adolescents, led to a decline of the share price of such companies as Tencent Holdings Ltd ADR (OTC: TCEHY), NetEase Inc (NASDAQ: NTES), and Bilibili Inc (NASDAQ: BILI). However, even in such circumstances, investors show interest towards Chinese companies.
The famous ARK Invest manager Cathie Wood earlier sold Chinese stocks with a loss, but after JD.com (NASDAQ: JD) and Pinduoduo (NASDAQ: PDF), she decided to invest in Chinese companies again. All in all, market players see the risks of investments in Chinese companies but cannot withstand the temptation to buy stocks.
In this article, I suggest taking a look at the Chinese market and tell you about 3 companies the shares of which might grow when business regulations in China stabilize.
Who is the real rival of Tesla in China?
We have got used to thinking that the main rival of Tesla (NASDAQ: TSLA) in China is NIO. But if we look at the statistics of cars sold in the Chinese market in Q2, we will see that this is a misleading idea. By the end of Q2, Boyd Gaming had sold 54,841 fully electric cars. NIO sold 21,896 electric cars. Tesla sold 61,745 electric cars in China, so Boyd Gaming looks more like the main rival.
Apart from electric cars the company also sells hybrid vehicles, and in this sector, dynamics are positive every month. For example, in July Boyd Gaming sold 50,492 hybrid cars, which is 170% more than in July 2020.
The advantage of Boyd Gaming against such Chinese car-makers as NIO, Spent, Like auto, is that the former is profitable. By the end of Q2, it had venerated 113 million USD of net profit.
Buffett invests in director-general of Boyd Gaming Corporation
There is one more detail that might seem tiny yet it supports the idea of investing in Boyd Gaming. 11 years ago, Warren Buffett broke his rule to invest in those companies the business of which he understood and invested in Boyd Gaming. He later admitted that he knew little about either electric cars or batteries. Buffett was impressed by the director-general of the company Wáng Chuánfú, or, more precisely, the description of this person given by Buffett's affiliate Charles Munger. Munger told the Fortune Magazine that "the guy" was a combination of Thomas Edison and Jack Welch. Something like Edison on the technical side and Welch in the sense that he did what he wanted to.
That time Berkshire Hathaway bought 10% of Boyd Gaming. On the chart of 11 years ago, the shares cost about 10 USD. Last spring, the stock price dropped to this level but then aimed directly upwards. Now the shares cost 62 USD. It is important for us because Wáng Chuánfú does still manage the company.
Tech analysis of Boyd Gaming
Previously, Boyd Gaming shares bounced off the 200-days Moving Average and are trading above it, which indicates a prevalent uptrend. The nearest resistance level is 65 USD. If the price breaks it away, it will grow again and renew the all-time high of 71 USD.
https://blog.roboforex.com/wp-content/uploads/2021/09/BYD-D1-1200x621.png
Bottom line
The Chinese authorities are trying to improve the demographic situation in the country, so they are now busy looking for those in charge of the slow-down in this sphere (the law one family-one child is apparently forgotten). As a result, the stock market is in turmoil as no one knows when those responsible will be punished and who turns out to be blamed. In the meantime, the government fights monopolies, which makes the market even more nervous. The market is also getting cleaned from companies that cannot pay off their debts, i.e. the authorities reject to help. All this makes investments super risky, so think of it if you decide to put your money in Chinese companies.
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What Is Russell 2000 and How Does It Differ from S&P 500?
Author: Victor Gryazin
This overview is devoted to a popular stock index Russell 2000: its contents, its differences from the S&P 500, and ways of trading it.
What is Russell 2000?
The Russell 2000 index (US Small Cap 2000) is one of the leading global indices based on the stock prices of 2,000 companies with small capitalization traded in the USA. The index was created in 1984 by the Frank Russell Company, a part of the London Stock Exchange. Russell 2000 is called a wide market index among small companies as it represents stock price dynamics of tier 2 and 3 companies.
The Russell family consists of several indices, the most famous of them being:- Russell 3000 is an index based on the stock prices of 3,000 largest public companies registered in the USA. Their overall capitalization makes up for 97% of the American stock market.
- Russell 2000 is an index consisting of 2,000 smallest companies of the Russell 3000 index.
- Russell 1000 is an index that tracks 1,000 stocks with the highest rating from Russell 3000.
Russell 2000 is the most popular index among investors who hold shares of companies with small capitalization. Investors usually track this index to assess the market efficacy of small enterprises, mostly working for the domestic market. As long as there are so many companies in the index, your portfolio automatically diversifies.
Leading companies of Russell 2000 include startups in the spheres of healthcare, food, and consumer goods. Russell 2000 is calculated based on capitalization-weighed stock price of all the companies in it. The index gets revised every year, some companies being removed from and some added to it.
https://blog.roboforex.com/wp-content/uploads/2021/09/Russell2000.png
How does Russell 2000 differ from S&P 500?- The number of companies: S&P 500 uses the shares of 500 largest companies, and Russell 2000 – the shares of 2000 smaller ones.
- Capitalization of companies: S&P 500 tracks the leading companies; it is meant for investors who hold the shares of large enterprises. Russell 2000 demonstrates the state of affairs in small companies; it is meant for investors who hold small but promising shares in their portfolios.
- Volatility: depending on the current market conditions, the volatility of S&P 500 and Russell 2000 may differ. At certain times, one index demonstrates better volatility, while the other comes to the scene as soon as the situation changes.
- These two indices have both differences and common features. S&P 500 is a wide market index that includes companies with the highest capitalization, while Russell 2000 is a wide market index with a low capitalization. The main differences are as follows:
On the whole, regardless of all the differences, S&P 500 and Russell 2000 have been showing similar dynamics.
https://blog.roboforex.com/wp-content/uploads/2021/09/Russell2000-SP500-1052x630.png
How to trade Russell 2000
First of all, Russell 2000 is a most popular investment instrument but it can be used for short-term trading as well. Thanks to a wide range of instruments (ETFs, futures, options, CFDs) for trading Russell 2000, different strategies may be used.
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RoboForex: changes in trading schedule (Labor Day in the USA)
We’re informing you that due to Labor Day in the USA on September 6th 2021, there will be some changes in the trading schedule*.
MetaTrader 4 / MetaTrader 5 platforms
Trading schedule on Metals (XAUUSD, XAGUSD) and CFDs on Crude Oil (WTI, Brent)- September 6th, 2021 - trading stops at 7:45 PM server time.
- September 7th, 2021 - trading starts as usual.
Trading schedule on CFDs on US indices (US500Cash, US30Cash, USTechCash) and Japanese index JP225Cash- September 6th, 2021 - trading stops at 7:45 PM server time.
- September 7th, 2021 - trading starts as usual.
Trading schedule on CFDs on US stocks- September 6th, 2021 - no trading.
- September 7th, 2021 - trading starts as usual.
R Trader platform
Trading schedule on US stocks and ETFs- September 6th, 2021 - no trading.
- September 7th, 2021 - trading starts as usual.
Trading schedule on CFDs on US stocks and ETFs- September 6th, 2021 - no trading.
- September 7th, 2021 - trading starts as usual.
Trading schedule on CFDs on US indices (US500, US30, NAS100) and Japanese Indice JPY225- September 6th, 2021 - no trading.
- September 7th, 2021 - trading starts as usual.
Trading schedule on Metals (XAUUSD, XAGUSD) and CFDs on Crude Oil (BRENT.oil, WTI.oil)- September 6th, 2021 - trading stops at 7:45 PM server time.
- September 7th, 2021 - trading starts as usual.
Trading schedule on Metals (XAUUSD, XAGUSD)- September 6th, 2021 - trading stops at 7:45 PM server time.
- September 7th, 2021 - trading starts as usual.
* - This schedule is for informational purposes only and may be changed by the provider.
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3 Stocks that Can Grow This Autumn
Author: Eugene Savitsky
The stock market cannot live without tart topics; investors always need something to anticipate. An increase in the interest rate? Uncertainty is really tiresome. Inflation? Jerome Powell told us not to worry, and we shall not for the time being.
What is left? Well, autumn is coming, and this means the number of respiratory diseases will become more frequent. And this, in turn, means COVID-19, only the Delta type.
More people go to hospital in the USA
People’s fears about the new coronavirus type are rather fair. On August 2nd, 10,000 people were put to hospital just in Florida and Louisiana, which is the absolute high since the beginning of the pandemic. This did not lead to a new quarantine yet, but wearing masks is now a must. Healthcare workers also fall ill, and this makes things even more complicated because there is a personnel shortage in healthcare institutions. The government is calling for total vaccination.
If earlier there used to be more elderly people among those put to hospitals, these days younger people, i.e. the active part of the population, fall prey to the virus more often. This might turn out to be a bad influence on business.
Should we wait for a crisis in autumn?
Will lockdowns of last year repeat themselves? I quite doubt this. What would they need vaccination, otherwise? Will they admit that it was a waste of money?
It would be too simple. Stocks would fall by 50-80% again. Investors would rush at buying them, knowing what was to follow, and absolutely everyone would make money. Like fun.
Each new crisis goes by a scenario that never came to life before, and the repetition period is much longer than a year.
Zoom Video Communications shares are growing
So, do investors indeed fear a new wave of COVID-19? Yes, they do. The media are speculating on this all the time, making market participants nervous.
The most prominent beneficiary of COVID-19 in 2020 was Zoom Video Communications, Inc. (NASDAQ: ZM). The last steep growth of its stocks from 350 to 400 USD was propelled by the expectations that the company’s services would become popular again with a new quarantine.
https://blog.roboforex.com/wp-content/uploads/2021/08/zm1-1076x630.png
In this chart, we can see the pair sky-rocketing in 2014 due to the Ukrainian events and imposing sanctions on Russia.
The growth lasted for almost 2 years. If the average daily volatility is about 30-50 kopecks, during that period it kept growing, reaching 27 rubles at times. Only the decisiveness of the CB and interest rates lifted by 17% managed to stop this.
Closing thoughts
Information hurricane around the Delta strain will only speed up, and market players will sometimes pay attention to the issuers that have experienced a positive influence of lockdowns.
The worst scenario is a new quarantine imposed, in which case companies that have gone deeper in debt will be threatened bankruptcy, and airlines are most vulnerable here. In autumn, avoid companies deeply in debt and with a small free money flow.
As for delivery services, they have enough money to pay off their debts, buy back shares, and pay dividends. There is always a risk, of course, but there it is minimal.
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RoboForex: changes in trading schedule (Late Summer Bank Holiday in the United Kingdom)
We’re informing you that due to the public holiday in the United Kingdom (Late Summer Bank Holiday) on August 30th 2021, several instruments will be traded according to the changed schedule*.
MetaTrader 4 / MetaTrader 5 platforms
Trading schedule on Russian GDRs- August 30th, 2021 - no trading.
- August 31st, 2021 - trading starts as usual.
R Trader platform
Trading schedule on CFDs on UK stocks- August 30th, 2021 - no trading.
- August 31st, 2021 - trading starts as usual.
Trading schedule on CFDs on UK100 index- August 30th, 2021 - no trading.
- August 31st, 2021 - trading starts as usual.
* - This schedule is for informational purposes only and may be changed by the provider.
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What Happens to Oil Market over 2021?
Author: Anna Rostova
In 2021, the oil market has been in turmoil. It seems that this will not change in the nearest future. Let us look into detail.
Is there actually demand?
https://blog.roboforex.com/wp-content/uploads/2020/11/brent.jpg
The International Energy Agency thinks that in 2021, oil demand will end up at 96.2 million barrel a day. Tye last revision gave slightly worse digits that initially.
In June, global demand extended to 3.8 million barrel a day because the mobility of people and business in Europe and North America increased. However, in July, worse pandemic conditions made the demand shrink.
All expectation concerning the demand have to deal with the pandemic. The latter prescribes its conditions. Some European countries started imposing certain restrictions again because the number of people falling prey to the new Delta strain is increasing. This type of the coronavirus is more aggressive than the previous one.
There are fears about the virus spreading through Asia. New Zealand has already started a lockdown; situations in China and Japan are threatening. The digits are not as large, yet the very trend is scary.
Australia has thrown its defense forces for watching out during curfew in Sydney. In Japan, regardless of the state of emergency in some prefectures, the daily number of the infected beats records of 100,000 people.
As long as Delta dictates its conditions to consumers and business, global commodity suppliers will not manage to increase sales.
There is one more detail to pay attention to. India starts selling oil from strategic reserves. This is done to empty a part of space (about 30%) to be used further by private companies. India is supposed to sell about 10 million barrels a day extra. These volumes will partially smooth out supply shortage, though this problem has become less acute then before.
Oil reserves in China have been decreasing for four months in a row. In July, they dropped by 224,000 barrels a day. This is weird: China is one of the largest global oil importers. The phenomenon is described by statistics that shows that industrial production in the country has worsened alongside retail sales.
Also, there is OPEC+ that increases production every month, trying to return to the supply market what has been taken away before.
Taken together, supply is quite abundant, while demand is still questionable. Nothing promises stabilization here.
Do not forget OPEC+
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By September 2022, OPEC and countries that joined it, will have returned 5.8 million barrels of oil a day to the market. These are volumes that have been taken out of the market to balance oil prices. Now things are getting back to what they were like.
August through the end of 2021, the market will be supplied by 400,000 barrels a day. The speed is more than moderate, which allows for keeping a close eye on the demand and avoiding excessive pressure on the quotations.
Quite recently, US authorities asked OPEC+ for further increasing production: in the USA, gasoline prices are growing, which worsens inflation pressure and possibly slows down economic growth. Washington is nervous and is looking for ways of decreasing the pressure.
The easiest way out is to contract with large suppliers about a general increase in production. However, OPEC+ countries decided to avoid hasty steps and refused.
Incident OPEC+, they think that oil markets do not need more crude material than they have now. This year, a barrel of Brent has already grown by 35%. Some say that OPEC+ holds back production, trying to reach their own goals, such as never let the quotations fall to fast.
If we admit that oil supply will be extending too fast, investors and capital markets will face a decrease in commodity prices.
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How to Trade USD/RUB?
Author: Victor Gryazin
USD/RUB is an exotic currency pair, in which the quoting currency - the Russian ruble - is the most interesting. The article is devoted to the characteristics if the pair and peculiarities of trading it.
General information about the ruble
Russian ruble is the currency of the Russian Federation. It is the second-oldest currency in the world after the British pound.
The modern ruble appeared in 1991. Later it underwent two monetary reforms: in 1993 and 1998. Since 2014, its exchange rate has been “floating”, which means it fully depends on the demand and supply in the currency market.
The Russian ruble is controlled by the Central bank of Russia along the regulations of the International Monetary Fund. Note that this monetary policy is explained by the development of Russian independent economy.
The Russian ruble takes the 18th place, or 0.70%, in the global currency turnover. To compare, the US dollar is number 1, taking up to 40% of the turnover; next goes the euro (30%), yuan (1.5%).
Trading peculiarities of the Russian ruble
On global trading platforms, the ruble is traded against the USD and EUR. Its trading peculiarities would be:- Periodic influence of Western sanctions since 2014;
- Periodic influence of the commodity sector on the whole of Russian economy.
Both factors reflect in the exchange rate of the Russian ruble. Forex charts demonstrate quite significant volatility in the times of such events.
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In this chart, we can see the pair sky-rocketing in 2014 due to the Ukrainian events and imposing sanctions on Russia.
The growth lasted for almost 2 years. If the average daily volatility is about 30-50 kopecks, during that period it kept growing, reaching 27 rubles at times. Only the decisiveness of the CB and interest rates lifted by 17% managed to stop this.
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