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[Vlad RF]

How to Use Standard Deviation Indicator in Trading

Author: Victor Gryazin

Dear Clients and Partners,​

Today the article is devoted to the Standard Deviation indicator. It helps evaluate the dynamics of volatility of a financial instrument and find promising entry points.

What the indicator shows

Standard Deviation (STDev) is a trading instrument that shows how far the price of a financial instrument deviates from standard values of a certain period. It shows the deviation from a Simple Moving Average and thus helps to assess the change in the price volatility.

The indicator conditionally belongs to trend ones: when it grows, this might mean the beginning of a new market trend. The higher the volatility and the more the price fluctuates from the average over the chosen period, the higher STDev values will be. And vice versa: if the quotes are stable, trading in a narrow price range, indicator values will fall to the lows.

STDev can be used for trading on its own and alongside other indicators. Also, it is used inside more complicated indicators. For example, it can be found in a famous channel indicator Bollinger Bands: STDev helps to calculate the borders of the price range for the quotes.

Standard Deviation appears in a separate window under the chart and has just one main line. Its values start with 0 and always remain positive, i.e. never drop under 0.

The indicator does not show trend direction. The line will grow alongside the growth of volatility regardless of the market direction, equally when the quotes are growing and falling.

How to install Standard Deviation

Standard Deviation is built in the majority of popular trading platforms. To install it on the chosen price chart on the MetaTrader 4 and MetaTrader 5 platforms, go to the Main Menu. Your algorithm is: Main Menu – Insert – Indicators – Trend – Standard Deviation.

You can customize the following settings:

• Period is the period for which the indicator will be calculated. By default, it is 20.
• Apply to: choose the price that calculations will be based on. By default, it is Close.
• MA method is the calculation method for the MA. By default, it is Simple.
• Style sets the appearance of the line. You can change its color, width, and representation method.

Calculating Standard Deviation

To calculate the indicator, use the following formula of statistic average square deviation:

Standard Deviation = Sqrt (SUM ((CLOSE - SMA (CLOSE, N)) ^ 2, N) /N)

Where:

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

What Are Decentralized Finance

Author: Andrey Goilov

Dear Clients and Partners,​

Decentralized Finance (DeFi) are an alternative to the traditional banking sector. It includes blockchain apps and services that facilitate digital transactions between the participants directly, without intermediaries. As the crypto community thinks, the current financial system is obsolete, it lacks transparency, and is highly controlled.

DeFi replaces traditional technology by open source protocols, granting access to financial services to anyone. The systems are maintained by the users. Meanwhile, the projects remain open and free of regulators that can block a transaction or deprive a user of access to a certain service.

Services feature crediting, investments, and buying crypto. Thanks to DeFi, those institutions that used to process operations slowly and be prone to human mistakes, became automatic and safe. DeFi provides passive income from storing crypto and save money on transactions and credits.

How DeFi is different from traditional finance

To understand the idea of DeFi and their popularity, it is important to see the difference between it and centralized, or traditional, finance. Here are the main issues of the banking sector that DeFi solves today:

• Banking services are not available to everyone
• Financial services include hidden payments
• Transaction take time.
• Financial entities have work hours.

In the classic banking sector, money is stores in banks and other financial institutions, the only goal of which is making money. Transactions are processed by third party services that charge fees for their intermediary functions.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex received the “Best Stocks Broker Global” award

Dear Clients and Partners,​

We’re happy to share the good news: RoboForex is recognised as the "Best Stocks Broker Global 2022" by The London Trader Show Awards. It’s an annual conference in London, where market professionals gather to discuss different trends in financial instrument trading. The event also implies awarding brokers for their quality products and services. The winners are decided by a vote among experts, which is held throughout the month before the conference starts

• Over 12,000 instruments
  Stocks, Indices, and other popular exchange-traded and OTC assets.
  
  
• Best trading solutions
  Trading operations can be performed through reliable terminals, such as MetaTrader 4 and MetaTrader 5, as well as the R StocksTrader multi-asset platform.
  
  
• Charge-free additional materials
  RoboForex clients have access to a rich knowledge base and quick analytical tools.

Moving forward is our style!

The RoboForex team keeps a close eye on new trends in the industry and follows up on suggestions of the company’s clients and partners. A growing number of awards says that our products and services get better and meet the requirements of the market.

​

Thank you for choosing RoboForex and helping us to improve. Each of the Company’s successes is our common victory!

​

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project will continue with the following exciting competitions on demo accounts:

The 132nd competition of "Demo Forex" has gained "full speed".
The 353rd competition of "Week with CFD" has just started.
At 12:00, March 23rd, 2022, starts the 487th competition of "Trade Day".
At 20:00, March 24th, 2022, starts the 401st competition of "KingSize MT5".

We remind you that to participate in any of our competitions, just go through a simple registration procedure once and then you'll get access to the chosen competitions with just a couple of mouse clicks.

We're looking forward to your joining in and wish you a winning trend!

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Trade Three Black Crows Candlestick Pattern

Author: Maks Artemov

Dear Clients and Partners,​

In candlestick analysis, all patterns can be divided into two groups – trend continuation patterns and reversal patterns. Today, the article is about the Three Black Crows pattern belonging to the second group. This is definitely not the most frequent pattern on the chart yet experienced traders who use candlestick analysis are well acquainted with it.

How Three Black Crows pattern forms

After a lengthy ascending impulse and a lot of purchases market players start closing their positions. The price forms a minor gap, and the first candlestick out of the three comprising the pattern opens above the previous closing price or at the same level.

Then the second candlestick opens at the close level of the first one, and after it closes in its turn, the third candlestick opens. The opening price of the third one coincides with the closing price of the second one or belongs somewhere close to this level. Next, the trend reverses.

Conditions for Three Black Crows

• There is a lengthy ascending movement of the quotes.
• The pattern forms at the resistance level.
• The three candlesticks are of roughly the same size.
• Three candlesticks successively forming on a smaller timeframe, form one big Engulfing candlestick on a larger one.
• Each next candlestick opens at the close level of the previous one or a bit higher.
• Shadows of the candlesticks are relatively small or totally lacking.

Examples of using Three Black Crows

This pattern can be used both alongside other means of analysis and on its own. Indicators act as additional filters that enhance trade efficacy.

Example of selling by the pattern without indicators

• On the EUR/AUD chart, there has formed a Hanging Man.
• After that, at the top of the uptrend, there formed Three Black Crows.
• When the third candlestick closes, open a selling position at the fourth candlestick.
• Stop Loss is to be placed at the nearest high.
• Place the TP as 1:3 against the SL. In this case, the SL is 900 points and the TP 1, accordingly – 2,700 points.
• Later, when the price approaches the TP 1, the trader can place a TP 2 at the next support level.
• The trader can monitor the position and move the SL to the positive zone when necessary.

Bottom line

Before using Three Black Crows, the trader needs to study all of its conditions and peculiarities. The strategy is t be tested alongside other means of market analysis.

For example, the trader can try out those indicators they are used to. This will help filter signals from Three Black Crows.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

How to Use Correlation Calculator for Currency Pairs

Author: Victor Gryazin

Dear Clients and Partners,​

This overview is devoted to the issue of correlation of currency pairs, counting it with a special calculator, and using it in trading.

What is currency pair correlation

In finance, correlation is a statistical measurement of how two assets move one against another. In other words, this is the capability of one financial instrument follow another one. For example, gold and silver have high correlation.

The idea of currency correlation represents the connections between currency pairs in Forex, the dependence of their movements one from another. Correlation demonstrates whether two pairs fluctuate similarly: the higher the correlation, the more in run are the two pairs. Currency pairs with strong correlation move somewhat in unison.

Positive correlation

Positive (or direct) correlation means that quotes go in the same direction – up or down.

For example, strong positive correlation is demonstrated by EUR/USD and EUR/CAD. In the picture below it is obvious that the quotes of these pairs often go in one direction, and their charts look quite similar.

How to calculate correlation indices

To assess the correlation of two instruments, there is a special index. It is estimated in shares, or percent: 100% = 1 for positive correlation and -1 for negative.

For calculating the index, Pearson’s formula is used. First, a set of values of both assets is formed – X and Y. Then average X and Y values are calculated. Next, they add up the product of the deviation of each set from the average and divide them by the product of the standard deviation.

The values of the correlation index are between +1 and -1.

The meaning of the values is as follows:

• 0 – no correlation. Currency pairs show no dependence on one the other.
• +1 – full positive correlation. Two currency pairs go in one direction, coinciding in movement size.
• -1 – full negative correlation. Two currency pairs go in the opposite directions, coinciding in movement size.

Risks of using correlation in Forex

It should be noted that correlation between two currency pairs is not a stable and constant factor. It can change with time. Different political and social crises, unexpected changes in credit and monetary policies can alter the normal correlation at any moment, so that it stops working normally.

So, when using correlation in trading, the trader has to follow their risk management rules. Correlation can be used as some sort of a filter alongside classical fundamental and tech analysis. Before using correlation for real, practicing on a demo account is highly recommended.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the RoboForex company's project called ContestFX is waiting for you to participate in the following competitions:

The 132nd competition of "Demo Forex" has reached the "finish line".
The 354th competition of "Week with CFD" has started today.
488th competition of "Trade Day" will start on 30.03.2022 at 12:00.
402nd competition of "KingSize MT5" will start on 31.03.2022 at 20:00.

All winners of our competitions receive funds to their real trading accounts, which they can use to perform trading operations on the Forex market without investing their own financial savings required as the first deposit.

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

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Calculate ROA: Formula and Examples

Author: Maks Artemov

Dear Clients and Partners,​

This article is devoted to the market multiplier called ROA: what it is necessary for, how it is calculated, what peculiarities, drawbacks, and advantages it has, and how it can be used.

What is ROA multiplier

ROA (Return on Assets) is the multiplier that shows the profitability of assets. It expresses the ratio of the net profit and the average-weighted size of the assets, demonstrating the efficacy of using the capital of a company. It is expressed in percent.

Calculation formula of ROA

ROA = Net Profit / Average Assets

Where:

• Net Profit is the net profit of the company over the calculation period. The latter is usually a year or a quarter.
• Average Assets is the average-weighted size of the assets of the company.

Average Assets calculation formula:

Average Assets = (Assets 1 + Assets 2) / 2

Where:

• Assets 1 is the size of the assets at the beginning of the calculation period.
• Assets 2 is the size of the assets at the end of the calculation period.

Nowadays it is hardly necessary to calculate the ROA manually because this information is available in open sources.

Peculiarities of ROA

The ROA differs depending on the sector in which the company works and the nature of its business. For example, in services, the ROA will be higher than in the oil industry.

The reason is the working capital that companies need for functioning and production. The more the company spends on development, the smaller ROA it will have over a calculation period.

The intermediate conclusion is that comparison by the ROA can be accurate and correct only for companies working in one sphere of business. And the higher the ROA, the better for the company and its investors.

Closing thoughts

As many other multipliers, the ROA has its drawbacks and advantages. The multiplier can only give a prelim evaluation of the return on investments in the company, Optimum analysis should include several multipliers and financial reports of the company.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

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

The 133rd competition of "Demo Forex" and 355th competition of "Week with CFD" have just started.
489th competition of "Trade Day" will start on 06.04.2022 at 12:00.
403rd competition of "KingSize MT5" will start on 07.04.2022 at 20:00.

To take part in our competitions, it is enough to go through a simple registration procedure and then you'll get access to any competition with just a couple of mouse clicks.

We wish good luck to all of you!

Sincerely,
RoboForex Contest

 

[Vlad RF]

What It is Important to Know about NFT in 2022

Author: Andrey Goilov

Dear Clients and Partners,​

Last year, when people started selling NFT for millions of dollars, these digital assets became a new investment option. Some investors remained skeptical, while others became quite confident that non-fungible tokens would change the market.

For example, Twitter founder Jack Dorsey sold the tokenised version of his first personal tweet for $3 millions. For your information, he put up for sale a tweet saying “just setting up my twitter”, and the demand was insane.

What is NFT crypto token

Non-Fungible Tokens are unique blockchain-based digital assets the, among other things, have peculiar metadata. NFTs are coded by the same software that is used for digital currencies. They are sold and bought on digital platforms for crypto.

The NFT technology is used for creating a unique digital certificate of a valuable thing, such as a painting, photo, music, video, and even real estate. Moreover, tokenising tangible assets makes buying them more efficient and fraud-safe.

Current popularity of NFT crypto tokens is explained by how easy they are to buy. In December last year, there were NFTs sold for $12 billion.

How NFT differs from crypto

NFT and crypto have two obvious similarities: both are digital currencies and blockchain-based. However, digital money is fungible, and crypto exchange confirms it.

Moreover, each altcoin remains valuable regardless of the platform it was bought on. For example, each BTC equals any other BTC.

A less obvious common feature of NFT and crypto are speculation markets that create agitation around currency prices. The price of a token depends on demand: when the token is popular, the price grows, when the demand shrinks – the price follows it.

Types of NFT

In most cases, non-fungible tokens are created from tangible or non-tangible objects. Most popular options are virtual and physically existing real estate, sport events, and gaming accessories.

Real estate

Apartments and houses have unique furnishing and decoration, which means they satisfy the conditions of NFT. There are already examples of selling real estate as NFTs.

Now NFT companies can gather money for building a new apartment complex by selling ownership to individual investors as NFTs. Then those investors will be able to sell their NFTs to next investors while the real estate is being built.

Virtual real estate

Metaverse is a digital reflection of the real world, and the demand for it is growing all too fast. An example of NFTs in metaverse is the Decentraland project.

This is a three-D gaming world where gamers buy virtual land plots and build houses on them. Each land plot is a non-fungible token. Investors recommend keeping an eye on this market: virtual towns are built much faster than real ones.

What perspectives NFT market has

Flourishing growth provoked overwhelming skepticism of market experts, and many of them still insist on NFTs being a trivial bubble. However, these days such global brands as Nike or Microsoft keep experimenting with NFTs and the metaverse.

Analysts declare that NFTs and crypto will eventually be a part of the metaverse, and NFTs will integrate in the virtual world much faster. This idea is confirmed by the strong concern of global brands about digital assets.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team