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Vlad RF

RoboForex Representative
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243
What Is Russell 2000 and How Does It Differ from S&P 500?

Author: Victor Gryazin

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Dear Clients and Partners,

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.

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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.

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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.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

Thiagoibj

Recruit
Messages
14
Will Roboforex make scams and widen hugely the spread on Russell 2000 / 3000 too? Because this is your specialitty.
 

Vlad RF

RoboForex Representative
Messages
243
Why Is It Time to Invest in China? 3 Promising Companies for Investing

Author: Eugene Savitsky

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Dear Clients and Partners,

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.

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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.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

Thiagoibj

Recruit
Messages
14
Will Roboforex make scams and widen hugely the spread on Russell 2000 / 3000 too? Because this is your specialty.
 

RoboForex Contest

RoboForex Representative
Messages
73
Dear traders!

This week, RoboForex's project called ContestFX offers you the following competitions on demo accounts:

The 126th competition of "Demo Forex" entered its second week.
The 327th competition of "Week with CFD" has just kicked off.
460th competition of "Trade Day" will start on 15.09.2021 at 12:00.
376th competition of "KingSize MT5" will start on 16.09.2021 at 20:00.

To participate in any of the chosen competitions, it's enough to go through a simple registration process just once. If you win, the prize money you received will allow you to perform full-fledged trading on the Forex market without investing your own financial savings.

Good luck to all traders!

Sincerely,
RoboForex Contest
 

Vlad RF

RoboForex Representative
Messages
243
How to Trade by Day-Hour Strategy?

Author: Andrey Goilov

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Dear Clients and Partners,

Looking for signals on larger timeframes and then confirming them on smaller ones is quite a widespread strategy. Even in John Bollinger’s book on graphic patterns traders looked for graphic patterns in D1 charts and then switched to other TFs to wait for the same patterns to appear on them.

The Day-Hour trading strategy is exactly such a way of medium-term strategy, by which the trader searches for entry points on daily charts, then opens an H4 and assesses the strength of the signal on it. However, you do not need to look for any graphic patterns, as this type of trading is highly subjective: one trader sees one pattern, while another trader can see an absolutely different one at the same place of the chart.

By this strategy, the trader only cares for signals from technical indicators. This makes trading completely objective.

Which indicators to use for Day-Hour?

This strategy requires use of indicators. The first one is the usual Moving Average. The indicator is easy to use:
  • If the price is above the Moving Average, then the trade is bullish, hence look for signals confirming the growth;
  • If the price has dropped under the MA, the trend is bearish, and you need selling ideas.
The other two indicators used in the strategy are oscillators: the MACD and RSI.

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Most often, traders use a trend indicator and one or more oscillators to look for signals that confirm the trend.

All in all, add to the chart the following indicators:
  1. Moving Average (3). The “shift” parameter is also at 3. The line will be shifted three candlesticks to the right. This indicator is necessary on the daily chart.
  2. The MACD with the parameters 12, 120, 5. This is an indicator fir H4.
  3. The RSI with period 9. The overbought level is 70 and the oversold area is 30. This oscillator is also for H4.
All these indicators can be found in the standard settings of MetaTrader 4, MetaTrader 5, or R Trader. This is a huge advantage as you do not need to download or install anything extra.

Closing thoughts

The Day-Hour strategy is meant for trading the trend, as one of the main traders’ rules goes. For a decent market entry, the strategy implies analyzing both D1 and H4 of the instrument. This method decreases risks and gives a chance a catch a good movement on the D1.

The drawback of the strategy is that it remains valid only when there is a good movement on the chart. When the price is in a flat, the trader will constantly be seeing breakaways of the MA up and down, which might entail a series of bad trades. On the other hand, opening a position by a trend that is just beginning, you never know what levels it might reach.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

Vlad RF

RoboForex Representative
Messages
243
NZD/USD in Detail: How to Trade Kiwi Dollar?

Author: Igor Sayadov

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Dear Clients and Partners,

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.

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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.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

Thiagoibj

Recruit
Messages
14
What do you say about this manipulation of NZD prices on rollover time?? Liers, Scammers, BANDITS!!
 

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RoboForex Contest

RoboForex Representative
Messages
73
Dear traders!

This week, the ContestFX project is waiting for you in the following competitions:

The 126th competition of "Demo Forex" is in "full swing".
The 328th competition of "Week with CFD" has started today.
461st competition of "Trade Day" will start on 22.09.2021 at 12:00.
377th competition of "KingSize MT5" will start on 23.09.2021 at 20:00.

We remind you that all our winners receive funds to their real trading accounts as a reward and they can use them to earn on the Forex market without investing their financial resources as the required starting money.

Join us!

Sincerely,
RoboForex Contest
 
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