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Vlad RF

RoboForex Representative
Messages
312
How to Use Accumulative Swing Index in Trading

Author: Victor Gryazin

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Dear Clients and Partners,

This article explains what Accumulative Swing Index is, what signals it gives, how it is calculated and set up in a trading terminal, and, naturally, how it is used in trading.

What Accumulative Swing Index shows

Accumulative Swing Index (ASI) was invented and made popular by a famous trader, financial analyst, and creator of several other indicators Wells Wilder. He described the work of ASI in detail in his book New Concepts in Technical Trading Systems, published in 1978.

For calculating ASI, prices of the current and preceding timeframes are used – Close, Open, High, Low. The results help to assess current price dynamics of the instrument in question. The indicator appears in a separate window under the price chart and looks like one main line.

The line allows seeing the direction of the current market trend and confirms (or not) breakaways and bounces off the support/resistance levels on the chart. Growing ASI confirms an actual uptrend and falling ASI indicates a downtrend.

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How to install Accumulative Swing Index to trading terminal

Accumulative Swing Index is not among standard indicators in most trading terminals, which means to use it in MetaTrader 4, one needs to download the installation file and install the indicator. The file can be found on, for example, MetaQuotes Ltd.

This is how ASI is installed on MetaTrader 4: Main Menu – File – Open data catalogue – MQL4 – Indicators – paste the file to the folder – restart the terminal.

This is how ASI is added to the price chart: Main Menu – Insert – Indicators – User – ASI.

Accumulative Swing Index is normally used with preset parameters (variable T = 300).

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Closing thoughts

Accumulative Swing Index is a price change indicator created by a famous market guru Wells Wilder. ASI helps to determine the direction of the current market trend and can become a good support to complex technical analysis.

For trading with the indicator, divergences and confirmations of support/resistance lines breakaways can be used. Before applying the signals for real, practising on a demo account is highly advisable.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

RoboForex Contest

RoboForex Representative
Messages
109
Dear traders!

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

The 135th competition of "Demo Forex" started last week.
The 365th competition of "Week with CFD" has just kicked off.
The 499th competition of "Trade Day" will start on 15.06.2022, at 12:00.
The 413th competition of "KingSize MT5" will start on 16.06.2022, at 20:00.

If you haven't participated in our contests yet, trust me, there is nothing easier: go through a simple registration procedure on our website and get access to any of the competitons you like in just a couple of mouse clicks. If fortune smiles upon you and makes you a winner, then your well-deserved prize will be transferred to your real account and you'll be able to use it to enter the Forex market and to perform effective trading operations without investing your own funds.

Good luck!

Sincerely,
RoboForex Contest
 

Vlad RF

RoboForex Representative
Messages
312
Fiat Currency: All One Needs to Know

Author: Andrey Goilov

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Dear Clients and Partners,

This article is devoted to the idea of fiat currency and everything behind this notion. What is fiat money? When and what for it appeared? What value does it have? Which advantages and drawbacks does it have? Answers to these questions and more are in the article below.

What is fiat money

Fiat money is the banknotes we keep in the wallet and the sums we look at happily, logging in the mobile app of our bank on the smartphone. It is not suported by the country’s gold reserves or other precious metals. It does not have any internal cost, and its face value is set and guaranteed by the state.

Today almost all popular currencies, such as the dollar and euro, are fiat. Their value is based on the opportunity to exchange them for goods and services, to be used as means of saving and account unit of the country’s economy.

Some think that as long as fiat money is not bound to any goods, a risk of inflation emerges, which, in turn, makes goods and services pricier. For example, in the times of gold standard, the amount of money depended on the amount of assets in the country’s reserves: more gold – more money.

Fiat money is substantilly influenced by the demand and trust of local people. If they stop believing in the national currency, they will reject it, and the demand for other assets and currencies will increase.

Advantages of fiat currencies
  • Fiat money is used for exchanging and storing value, which is essential for the functioning of the national economy;
  • Making fiat money is more economic than making currencies bound to certain assets;
  • Fiat money lets the government and Central bank stimulate the economy in times of crises and smooth out the aftermaths of sky-rocketing;
  • Fiat money is not a scarce or limited resource: the government can print as much as needed;
  • Central banks have full control over the supply of fiat money, which lets them manage liquidity and interest rates.
Drawbacks of fiat money

The strong economic crisis of 2008 demonstrated that Central banks cannot always hold back serious consequences of recession by directly regulating the money mass. Hence, global crises will come back from time to time, having absolutely different nature.

A currency bound to gold looks more stable compared to fiat money because of limited gold supply. Fiat money, on the contrary, has value as long as the government supports it. Tiniest problems in either economy or politics can provoke a surge of inflation.

There are examples of trying to get out of economic trouble by active money printing that le to hyperinflation and the national currency fully losing value.

Bottom line

Fiat money is not perfect as it has serious drawbacks, yet it has no better alternative that would fast and smoothly replace it as a means of exchange, payment, and value storage.

One could bring up cryptocurrencies that has been acquiring popularity recently. They are limited in quantity, its cost must be growing until the last coin is mined, and this is a victory over the inflation of fiat money. However, due to high volatility and virtuality this type of money has not yet become a full replacement for the “normal” one.

Experiments with tightly binding money to gold have not yet yielded satisfactory results either; and hyperinflation may occur to any printed currency. With all the drawbacks, however, fiat money lets the government and Central banks react timely to the changes of the economic environment and keep markets stable and makes it easier for consumers to buy and sell goods and services.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

Vlad RF

RoboForex Representative
Messages
312
RoboForex: upcoming changes to the trading schedule in view of the Juneteenth Holiday

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Dear Clients and Partners,

We are informing you that changes will be made to the trading schedule due to the Juneteenth Holiday 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 Metals (XAUUSD and XAGUSD), US indices (US30Cash, US500Cash, and USTECHCash), the Japanese index J225Cash, and CFDs on oil (Brent and WTI)
  • 20 June 2022 – trading stops at 7:40 PM server time.
  • 21 June 2022 – trading starts as usual.
Schedule for trading on CFDs on US stocks
  • 20 June 2022 – no trading.
  • 21 June 2022 – trading starts as usual.
R StocksTrader platform

Schedule for trading on US stocks and ETFs
  • 20 June 2022 – no trading.
  • 21 June 2022 – trading starts as usual.
Schedule for trading on CFDs on US stocks and ETFs
  • 20 June 2022 – no trading.
  • 21 June 2022 – trading starts as usual.
Schedule for trading on CFDs on US indices (US500, US30, and NAS100) and the Japanese index JPY225
  • 20 June 2022 – no trading.
  • 21 June 2022 – trading starts as usual.
Schedule for trading on Metals (XAUUSD and XAGUSD) and CFDs on oil (WTI.oil, BRENT.oil)
  • 20 June 2022 – trading stops at 7:40 PM server time.
  • 21 June 2022 – trading starts as usual.
cTrader platform

Schedule for trading on Metals (XAUUSD and XAGUSD)
  • 20 June 2022 – trading stops at 7:40 PM server time.
  • 21 June 2022 – trading starts as usual.
Please take note of the above trading schedule changes when planning your trading activity.

Sincerely,
RoboForex team
 

RoboForex Contest

RoboForex Representative
Messages
109
Dear traders!

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

The 135th competition of "Demo Forex" has gained "cruising speed".
The 366th competition of "Week with CFD" has just started.
500th competition of "Trade Day" will start on 22.06.2022 at 12:00.
414th competition of "KingSize MT5" will start on 23.06.2022 at 20:00.

Participation in our contests does not require any complicated actions - all you have to do is to go through the registration procedure just once and then any competitions will be available to you in just a couple of mouse clicks.

Do not miss your chance!

Sincerely,
RoboForex Contest
 

Vlad RF

RoboForex Representative
Messages
312
How to Calculate Cost of Goods Sold: Formula and Examples

Author: Victor Gryazin

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Dear Clients and Partners,

This article is devoted to an economic index called Cost of Goods Sold: what it is, what it is used for, how it is calculated, and what accounting methods it has.

What is Cost of Goods Sold

Cost of Goods Sold (COGS) is an index that assesses the primary cost of sold goods. It accounts for the expenses on production of goods and services. Primary cost is often the second line in the profit and loss report that goes right after the earnings line. COGS helps to calculate the gross profit of a company.

Primary cost includes the main spending that have directly to do with production of goods and services:
  • expenses on crude materials and accessory, freight included;
  • expenses on wages for employees, including insurance and pension payments;
  • production expenses;
  • storage expenses.
In essense, the COGS is the cost of everything that needs to be done and bought to sell the product. However, the index does not account for indirect spending, such as on sales and marketing. Moreover, the COGS depends on the calculation method.

What COGS is used for

COGS is one of the most important indices in financial reports used for calculating gross profits. Gross profit is the difference between the earnings and primary costs and is one of the main profitability indices of the company. Thus, the COGS allows for assessing the dynamics of production spending and helps the management make well-weighted decisions.

Companies that are able to manage their spending on crude materials and workforce reasonably over the whole production cycle and to decrease the COGS when necessary, will have higher gross profits. Whereas if the company spends too much on production of their goods and services, and the COGS is too high, its gross profit will be falling.

With the Cost of Goods Sold, economists and investors can assess whether the company can manage its business efficiently. If the index grows, the net profit falls. This can be good for bringing down taxes on profits, yet the business will be less attractive for investors. So, as a rule, companies try to keep the COGS quite low and the net profit – rather high and thus more attractive for investing.

How COGS is calculated

An essential part of exact primary cost calculation is calculation and classification of goods in the inventory. This means the information needs to be updated regularly.

The task of the COGS is to demonstrate the primary cost of sales of a certain timeframe with account of what is left in stock. Indices necessary for calculations:
  • Beginning Inventory (BI) is the goods in stock at the beginning of the TF;
  • Purchases (P) for replenishing the stock;
  • Ending Inventory (EI) is the goods in stock at the end of the TF.
Calculation formula:

COGS = BI + P – EI

Example of calculating COGS


If the company has the BI = $5,000 at the beginning of the month, P = $3,000, and EI = $4,000 at the end of the month, the COGS will be $4,000.

COGS = 5000 (BI) + 3000 (P) – 4000 (EI) = 4000

Then we subtract the result from the monthly earnings and get the gross profit. Nowing the gross profit, we can find out the net profit by subtracting other expenses from the former, such as taxes.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

Vlad RF

RoboForex Representative
Messages
312
What One Needs to Know about REPO

Author: Maks Artemov

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Dear Clients and Partners,

This article is devoted to REPO — Repurchase Agreements — and everything about them: their peculiarities, advantages and drawbacks, risks and how to avoid them.

What are REPOs

REPO, aka Repurchase Agreement, is an agreement on selling securities that presumes their obligatory buyback at a certain price after certain time. Such agreements let the seller loan money quite fast.

A REPO consists of two part:
  • The owner of securities sells them to the buyer for a certain term and takes on the responsibility to buy them back as soon as the term ends. The term and the sum of the buyback are agreed upon by the parties beforehand.
  • When the term ends, the buyer is to give the securities back to the seller, receiving their money plus commission fee is exchange.
As a result, a REPO has two agreements inside: an operation with securities and a forward contract.

Advantages of REPOs
  • The seller can loan money quickly on market conditions without addressing a bank. Moreover, the operation itself does not take long.
  • The buyer can make a profit on short-term placement of free cash without the risk of losing it because they get securities in exchange. If the seller refuses to buy back their assets, the buyer can sell them freely in the stock market and get back their money.
Are there risks in REPOs

One of the risks is falling of the market price of the securities that the buyer has bought. In such a case, the seller can refuse to complete the second part of the agreement and never buy back the asset.

The seller will have to get rid of the securities at a lower price and suffer losses, or leave it in the portfolio and wait for the price to grow.

Another risk is the growth of the security price, so that the buyer can refuse to give them back.

Moreover, it might so happen that at the REPO expiry the buyer will have no necessary securities available. For example, they might have sold them at a better price. The buyer may always refuse to give the asset back to the seller for various reasons including bankruptcy.

Who gets dividends from shares in REPOs

All income from the securities — dividends, coupons, etc. — belongs to the seller because they own the shares. The buyer receives the securities as a temporary guarantee. That is why the buyer must pass all the income from the securities to the seller.

Also, the agreement can have other conditions, such as the buyer can receive dividends instead of the seller but the security price will fall accordingly.

Example of REPO

A market player has 100 shares of a company, 10 USD each. At a certain point, they need money, and they find a buyer ready to buy 100 shares right now but for 8 USD each.

Signing a REPO, the buyer agrees on selling (or returning) 100 shares for 8 USD each plus 10%. When the contract expires, the seller buys their shares back at the said price. As a result they got a loan for 10% a year, and the buyer got their money back and earned 10% of the whole sum.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

RoboForex Contest

RoboForex Representative
Messages
109
Dear traders!

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

The 135th competition of "Demo Forex" is approaching its end.
The 367th competition of "Week with CFD" has just kicked off.
The 501st competition of "Trade Day" will start on 29.06.2022 at 12:00.
The 415th competition of "KingSize MT5" will start on 30.06.2022 at 20:00.

No complicated actions are required for participation in our contests - all you have to do is to go through the registration procedure and then any competitions will be available to you in just a couple of mouse clicks.

We wish you good luck!

Sincerely,
RoboForex Contest
 

Vlad RF

RoboForex Representative
Messages
312
Bull Market: Characteristic and Trading Principles

Author: Victor Gryazin

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Dear Clients and Partners,

This article is devoted to the notion of the bill market: what it is, what peculiarities it has, and how to use it for trading.

What is the bull market

Bull market is a situation in a financial market when market prices are growing stably and investors are very optimistic. This term is more frequently used for the stock market yet it would be equally valid in the case of bonds, real estate, currencies, goods, and other financial spheres.

The term "bull market" describes lengthy time frames when most stocks grow stably and stock indices confidently renew highs. In other words, there is a long-term uptrend in the market: new highs and lows higher than the previous ones are set regularly. Normally, bull markets last from several months to several years.

Over history, the global stock market has passed through several such times. The longest of all started right after the mortgage crisis of 2008 in the US and ended with the COVID-19 pandemic in 2019. Over these years, the Nasdaq 100 stock index grew by more than 800%, while some popular share — by more than 1,000%.

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Characteristics of bull market

Such a state of things in the financial market quite often accompanies a growth cycle in the global economy. This is the most promising time for investors because companies and enterprises normally make a stable profit, and the unemployment rate remains low. In such times, people are ready to spend and invest more, and earnings in the stock market go up.

Main characteristics of the bull market:
  • Sustainable growth of asset prices. In the stock market context this means growth of market indices and stock prices. After minor corrections the quotes of securities and indices aim upwards again and regularly renew their highs.
  • Positive economic reports. Bull markets normally happen when the economy either starts growing after a crisis or is already strong. Interest rates are rather low, the GDP is growing, the unemployment rate falls, and companies report increased profits.
  • Demand exceeds supply. When economies are growing and the unemployment rate is low, investors try to buy and hold securities, hoping that their price will grow. A market appears that has more buyers who want to buy stocks than sellers.
  • Optimistic market players. When the stock market and economic indices grow, investors become more confident. They are more optimistic and interpret even bad news as temporary moves that can provide a better price for buying on corrections.
How to trade in bull markets

When the prices of most assets grow, it is easier to make a profit than when the market is uncertain. So here are some popular strategies for trading in a bull market.

Buy and hold

This is the most popular way to invest in a bull market: investors buy assets and hold them for as long as possible, until some evidence of the end of the uptrend appear. By this strategies, positions are held for really long — from several months to years. The longer the market grows, the more profit investors can make on their assets.

In case the investor buys stocks, they make money on their price growth and dividends from the issuer as well. Hence, securities with large dividend payments are most attractive to buyers.

The strategy also uses popular stock indices: they help diversify investments because they consist of many shares of various companies.

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Bottom line

The bull market is the gold age for investors: asset prices grow steadily, and all market players are optimistic. One can make a good profit, buying assets and holding them until they grow.

However, it should be realised that a reversal and the end to the bull market is hard to predict, so the rules of risk management are to be followed immaculately.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team
 

Vlad RF

RoboForex Representative
Messages
312
RoboForex: upcoming changes to the trading schedule in view of the Independence Day

roboforex-header.jpg


Dear Clients and Partners,

We are informing you that changes will be made to the trading schedule due to the Independence 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 Metals (XAUUSD and XAGUSD), US indices (US30Cash, US500Cash, and USTECHCash), the Japanese index J225Cash, and CFDs on oil (Brent and WTI)
  • 4 July 2022 – trading stops at 7:40 PM server time.
  • 5 July 2022 – trading starts as usual.
Schedule for trading on CFDs on US stocks
  • 4 July 2022 – no trading.
  • 5 July 2022 – trading starts as usual.

R StocksTrader platform

Schedule for trading on Currency pairs
  • 15 April 2022 - trading stops at 7:40 PM server time
  • 18 April 2022 - trading as usual.
Schedule for trading on US stocks and ETFs
  • 4 July 2022 – no trading.
  • 5 July 2022 – trading starts as usual.
Schedule for trading on CFDs on US stocks and ETFs
  • 4 July 2022 – no trading.
  • 5 July 2022 – trading starts as usual.
Schedule for trading on CFDs on US indices (US500, US30, and NAS100) and the Japanese index JPY225
  • 4 July 2022 – no trading.
  • 5 July 2022 – trading starts as usual.
Schedule for trading on Metals (XAUUSD and XAGUSD) and CFDs on oil (WTI.oil, BRENT.oil)
  • 4 July 2022 – trading stops at 7:40 PM server time.
  • 5 July 2022 – trading starts as usual.

cTrader platform

Schedule for trading on Metals (XAUUSD and XAGUSD)
  • 4 July 2022 – trading stops at 7:40 PM server time.
  • 5 July 2022 – trading starts as usual.
Please take note of the above trading schedule changes when planning your trading activity.

Sincerely,
RoboForex team
 
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