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[Vlad RF]

Demonstration and Real Accounts: Psychological Differences

Author : Timofey Zuev

Dear Clients and Partners,​

It is no secret that trading results on real and demo accounts always differ, the former results usually being worse. In other words, if you succeed in trading on a demo account, you should always make allowance for the real situation. Some details of the execution of real trade orders, which were not visible on the demo accounts, may lead to this difference; however, such details are not significant enough to lead to serious deviations of the results.

Working on a demo account, the trader has already chosen the timeframe, the instruments, the volume of the opening positions, the instruments of analysis, the levels of entrance and exit — all trading principles and approaches. Yes, the trader is ready to start working with real money, as, in essence, trading on a demo account is in no way different to the real one. However, the one exception here is the real psychological readiness of the trader. The devil is in the different attitude to trading demo money and the trader's own money.

Difference between real and demo trading

1. The trader treats their demo account with ease because they know that they can open another one with new starting capital any moment. As usual, there are lots of explanations to the failures on the previous account, among which one of the most popular one is: the price made a reversal when I was absent from the computer, so I could do nothing.

There is yet another category of traders who open a new account upon receiving a loss on the previous one — they just like it to begin trading from a profitable trade, and no other way. However weird it is, but they do not even realize that it will not be possible on a real account, as they will not be forgetting losses there with such ease.

It would be much wiser to allow for a limited number of paid demo accounts. In this case it is unlikely that traders were so light-minded.

2. Trading strategy is better visible on a demo account. Why? Because there is nothing easier than receive a planned Stop Loss so long that the money is not real. And nothing easier than wait for a Take Profit with the whirlpool of ideas of what you could buy on that money if you closed the position now. There is no need to change the volume of the position during trading on a demo account, as there is no fear of another loss or a decrease of the profit. That is why the trader can execute their trading plan without altering and impulsive correcting.

Reasons for losing the deposit

The reasons for losing the deposit are mostly psychological, including:

Greed. Upon reaching their goal, the trader cannot brace themselves and keeps trading, willing to earn more or make the sum tidy. They may go even further and try to make enough profit for both life and trading

Proceeding to the next goal without reaching the first one. If the trader starts receiving stable profit, their vigilance fades, and they relaxes, believing in their professionalism. Their appetite grows accordingly, so the trader thinks: what do I need a bike for if I can earn for a car? However, they are likely to get none: goals are to be chosen and reached subsequently.

Reinvesting. Reinvesting itself is good for it helps increase the working capital and the profit by increasing the volume of trades. However, this method should be used with much care. Just a part of the profit should be left for growing the deposit, no the whole of it. Why? Because a series of losses or an unstable profit may follow, and the trader, willing to increase the deposit (if it is small) or get more profit (if the deposit is large), is likely to lose all that they have earned. As a result, they will get back to the starting point.

Summary

I would like to mention that, working on a demo account, the trader will not feel the influence of these factors. Call it the charm of money.

Real and demo accounts have a too big difference, and the transition requires psychological adapting. One way to make the transition to real trading easier is using cent accounts. It is advised to have the same volume on the cent account as it is planned to open the main account with.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project, as usual, is waiting for you in the following contests:

The 149th competition of "Demo Forex" is approaching the final stage.
The 428th competition of "Week with CFD" has just started.
The 562nd competition of "Trade Day" will start on 30.08.2023 at 12:00.
The 476th competition of "KingSize MT5" will start on 31.08.2023 at 20:00.

Let us remind you that upon winning any of our demo competitions, you'll receive prize funds to your real account which you can use for trading in the Forex market instead of your own savings.

Good luck to all traders!

Sincerely,
RoboForex Contest

 

[Vlad RF]

Economic Indicators - The Basis for Forex Trading Strategy

Author : Timofey Zuev

Dear Clients and Partners,​

Let us have a look at the main economic indicators and their influence at the currency rates. The knowledge and understanding of these indicators are the basics of fundamental analysis and forecasting of price movements.

Interest Rate

Interest rate is an efficient instrument of credit and monetary policy of the state. Increasing interest rates, Central banks regulate demand for loans, reducing it, which decreases the expenses of people and impedes economic development. This measure is meant, first and foremost, for reducing the inflation rate and for prevention of overproduction of goods.
Decreasing interest rates leads to an increase in demand for loans, enhancing economic development.

The size of the interest rate is the basis for other economic parameters — rates of state and corporate bonds, credit rates for individuals and legal entities, etc. Central banks do not frequently change interest rates: this is a major market event, and all market players track such changes very carefully.

Gross Domestic Product (GDP)

The GDP is generalized data about the sum of the added value, produced by all producers in the country during a set period of time. The GDP surplus demonstrates the economic development of the country, its speed. Stable growth of the GDP is characteristic of stable economic development and also strengthening of the national currency, while a slowdown of the GDP growth means problems with the country's economy. The market reaction on the news about the GDP, the initial as well as corrected, is rather active and usually leads to serious movements of currency rates.

A report on the GDP is a wide analysis of all sectors of a country's economy. That is why different market players pick up the paragraphs that are of interest to them and make conclusions about the state of development of this or that country.

Consumer Price Index (CPI)

Consumer price index (CPI) is the main indicator of inflation in the country. For its calculation, the prices of the consumer goods basket during a certain period of time are used. In each country, the set of goods in the basket is different and is formed on the basis of statistical data. Such goods may be food, everyday objects, services, etc.

The prices for food and energy sources are the most volatile, so along with the CPI a so-called Core CPI is calculated, the latter including this category of goods from the consumer goods basket.

The CPI data is normally published on the tenth workday of each month as the percentage of the changes that have happened. In other words, what is published is the information by how many percent the current values have changed in comparison with the previous ones. The news about a change of a CPI value by just 0.2% leads to rather strong fluctuations of currency rates.

Producer Price Index (PPI)

Producer price index (or PPI) is an indicator of the price changes for the goods produced by national producers. The index includes the price for the raw materials, produced in the country and imported, on the intermediate products, on the finished products. The index includes all stages of goods production, as well as all spheres of production and agriculture. The difference from the CPI is that it does not include services and provides the analysis of price changes only at the level of primary wholesale trade.

Along with the PPI, the Core PPI data is also published; it does not include the prices for the goods of food and energy industries due to their high volatility. The PPI is published monthly on the tenth workday simultaneously with the CPI.

Trade Balance

Trade Balance, or International Trade, is the difference between the sum of export of goods and services and the sum of the import.

It influences exchange rates directly and reveals the competitiveness of the goods and serves, produced in the county, on the international market. Favorable trade balance (the situation when export surpluses import) signifies inflow of capital into the country, production development and, on the whole, has a positive influence on the economy.

Conversely, a deficit of trade balance, i.e. the situation when import surpluses export, signals low development of production, a lack of competitiveness of the national goods and is a generally negative factor for the country. This leads to the growth of the national debt as well as has a negative influence upon the exchange rate of the national currency, because its supply increases due to the necessity to buy more currency of the exporting state.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex: upcoming changes to the trading schedule in view of the Labor Day holiday in the US

Dear Clients and Partners,​

We are informing you of the upcoming adjustments to the trading schedule due to the Labor Day holiday in the US.

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

MetaTrader 4 / MetaTrader 5 platforms

Schedule for trading on CFDs on the US indices (US30Cash, US500Cash, USTECHCash) and the Japanese index JP225Cash

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

Schedule for trading on Metals (XAUUSD, XAGUSD) and CFDs on Oil (Brent, WTI)

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US stocks

• 4 September 2023 – no trading
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US futures

• 4 September 2023 – trading stops at 8:00 PM server time
• 5 September 2023 – trading as usual

R StocksTrader platform

Schedule for trading on US stocks and ETFs

• 4 September 2023 – no trading
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US stocks and ETFs

• 4 September 2023 – no trading
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on the US indices (US500, US30, and NAS100) and the Japanese index JPY225

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

Schedule for trading on Metals (XAUUSD and XAGUSD) and CFDs on oil (WTI.oil, BRENT.oil)

• 4 September 2023 – trading stops at 7:45 PM server time
• 5 September 2023 – trading as usual

Schedule for trading on CFDs on US futures

• 4 September 2023 – trading stops at 8:00 PM server time
• 5 September 2023 – trading as usual

Please take note of the above amendments to the trading schedule as you plan your trading activity.

Sincerely,
The RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, a RoboForex project called ContestFX presents you the following demo competitions:

The 150th competition of "Demo Forex" and the 429th competition of "Week with CFD" have just started.
The 563rd competition of "Trade Day" will start on 06.09.2023 at 12:00.
The 477th competition of "KingSize MT5" will start on 07.09.2023 at 20:00.

It does not take much effort to participate in any of our contests: all you need to do is register a trading account just once and then get access to any of the competitions you like in just a couple of mouse clicks.

We're looking forward to your joining in and wish you good luck!

Sincerely,
RoboForex Contest

 

[Vlad RF]

GBP/USD Analysis: Will Downward Momentum Persist in Autumn 2023?

Author : Victor Gryazin

Dear Clients and Partners,​

GBP/USD (British pound versus US Dollar) experienced steady growth since the beginning of 2023, hitting an annual high of 1.3142 in July, followed by a downward reversal and a correction. Today we will examine the key factors influencing the GBP/USD pair’s trajectory under the current conditions and analyse whether the downward trend is expected to continue.

Overview of the GBP/USD currency pair

GBP/USD is one of the major currency pairs and ranks among the top three most demanded and traded pairs in the foreign exchange market alongside EUR/USD and USD/JPY. The base currency is the pound sterling, and the quote currency is the US dollar.

The behaviour of the GBP/USD quotes reflects the comparative state of the current economic conditions in the US and the UK. A rise in quotes indicates the strength of the pound and the weakness of the US dollar.

Given that the pound sterling is considered one of the most aggressive currencies in the financial market, the GBP/USD pair is characterised by a high level of volatility, which attracts traders and investors.

Trading characteristics of the GBP/USD pair

• The pair is traded round the clock from Monday to Friday, with significant trading volumes during the European and American sessions, leading to major movements
• The currency pair is characterised by high average daily volatility within the range of approximately 1,000-1,300 pips. During times of market force majeure, it has the potential for strong movements exceeding 2,000 pips per day
• The spread for GBP/USD is considered minimal, thanks to its high liquidity, and typically ranges around 10 pips in a calm market

GBP/USD dynamics in 2023

This year, the GBP/USD currency pair showed a moderate upward trend, starting 2023 at the 1.2070 mark. The pair later reached its lowest value near 1.1800, followed by a rise to the annual high of 1.3142. However, this gave way to a subsequent downward correction, with the quotes currently hovering around 1.2600. At the time of writing, it can be concluded that the pound sterling has been showing growth against the US dollar from January to August inclusive.

This year, the GBP/USD currency pair showed a moderate upward trend, starting 2023 at the 1.2070 mark. The pair later reached its lowest value near 1.1800, followed by a rise to the annual high of 1.3142. However, this gave way to a subsequent downward correction, with the quotes currently hovering around 1.2600. At the time of writing, it can be concluded that the pound sterling has been showing growth against the US dollar from January to August inclusive.

Factors influencing the GBP/USD exchange rate

The Bank of England’s monetary policy

This is the pivotal factor influencing the valuation of the pound sterling in the global currency market. The main tool of the Bank of England, the country’s central bank, to control inflation and affect the national currency exchange rate is the decisions on interest rates. If the interest rate increases, the exchange rate appreciates, while a decrease in the interest rate leads to a decline in the exchange rate.

Since December 2021, the UK regulator has been tightening the monetary policy in an attempt to curb rapidly rising inflation. The interest rate has increased from 0.1% to 5.25% over this period. The Bank of England’s Monetary Policy Committee is focused on achieving the inflation target of 2%. In June 2023, the CPI inflation index rose by 7.9% compared to last year’s statistics.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

7 Effective Trading Strategies for Beginners and Advanced in 2023

Author : Andrey Goilov

Dear Clients and Partners,​

In R Blog, we have discussed a whole range of forex trading strategies — from the simplest to the most intricate ones, from those suitable for beginners to those meant for experts, those with and without indicators. Today, I will try to enumerate 7 trading strategies of 2022, which will be especially useful for you if you have not tried some of them yet.

Always keep in mind that however beautiful trading strategies may seem, never rush at using it on real money. Start with a demo account where you can painlessly master the strategy, detecting its strong and weak sides. Only after you reach good results try trading on a real account.

Explore a world of diverse trading strategies in the list below, each accompanied by a comprehensive post featuring profound descriptions and clear trading rules. Simply click on the links corresponding to the strategy names to unlock all the essential information you need to confidently apply them in the financial markets.

1. The Fishing trading strategy

The Fishing trading strategy is meant for D1, however, you may try it on timeframes no smaller than H1. The strategy uses special indicators that you may download from the detailed description of Fishing.

The trading strategy gives two main signals for opening a position: a breakaway of the trendline drawn by the indicators and breakaways of the special sales and buy levels. In short, the whole work of Fishing is based on the indicators built in the strategy.

An obvious advantage f the method is trading on D1: you do not need to spend all of your time at the trading terminal; another advantage is that you trade the trend. The drawbacks are the lack of back-testing because the indicator draws the lines for the current moment only.

2. Woodies CCI trading strategy

The Woodies CCI trading strategy is based on an indicator with the same name — Woodies CCI. It will suit those who prefer analyzing the price chart themselves. The author offers various ways of trading by the indicator: using breakaways of trendlines, graphic levels, bounces off the zero line.

The author gives an interesting variant of trading the indicator chart; in essence, we do not need the price chart at all, you may open positions by the Woodies CCI signals only. The drawback is exactly the difficulty of such a system for beginners; for good work of the trading strategy, you still need to know the basics of tech analysis. On the other hand, you can back-test all the signals, gaining useful experience of work with the indicator.

3. Three Moving Averages strategy

Moving Averages are the oldest instrument of tech analysis. As soon as a strong trend begins, virtually no indicator will give better signals by the trend.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project is waiting for you with the following contests:

The 150th competition of "Demo Forex" has accelerated.
The 430th competition of "Week with CFD" has just kicked off.
The 564th competition of "Trade Day" will start on 13.09.2023 at 12:00.
The 478th competition of "KingSize MT5" will start on 14.09.2023 at 20:00.

We remind you that upon winning any of our competitions, winners receive prize funds to their real accounts and they can use those funds to make a profit in the Forex market instead of investing their own savings.

If you want to be one of the winners, don't miss your chance!

Sincerely,
RoboForex Contest

 

[Vlad RF]

NZD/USD Forecast: Will the Decline Continue in 2023?

Dear Clients and Partners,​

NZD/USD (New Zealand Dollar versus US Dollar) has been on a decline since the beginning of 2023. On 2 February, the pair reached a yearly high at 0.6534, followed by a gradual drop in price and eventually hit a low of 0.5887 on 29 August. At the time of writing, the quotes are within a correction phase at the level of 0.5979.

In this article, we will examine the key factors affecting the NZD/USD movements. We will conduct a technical analysis of the chart, share expert forecasts for 2023-2024, and aim to understand whether the decline of the pair will continue.

Overview of the NZD/USD currency pair

NZD/USD is one of the major currency pairs, with the New Zealand dollar ranking as the 14th most traded currency in the world according to a survey by the Bank for International Settlements (BIS), published in October 2022. It has held the number 10 spot since 2010 but was eventually overtaken by the Singapore dollar, Swedish krona, Korean won, and Norwegian krone.

The base currency in the NZD/USD pair is the New Zealand dollar, the country’s monetary unit and the quoted currency is the US dollar. The behaviour of the pair’s quotes depends on economic and political events in the two countries.

Trading characteristics of the NZD/USD pair

• The currency pair is traded round the clock from Monday to Friday, with the highest activity observed between the American and Asian sessions
• The pair is characterised by low average daily volatility within the range of 700-1,000 pips, with maximum movements in 2023 reaching 1,600 pips per day
• It is considered quite liquid in the foreign exchange market, which is why the spread for NZD/USD is minimal

Dynamics of the NZD/USD currency pair in 2023

The NZD/USD currency pair has been demonstrating a moderate downward trend, starting the year at the 0.6337 mark, and hitting an annual high near 0.6534 on 2 February. By March, the quotes had reached 0.6084, which was followed by a prolonged correction that lasted for 5 months. During this correction phase, the upper boundary was at the 0.6380 level, while the lower boundary hovered near 0.6065.

In July 2023, following the third test of the 0.6380 level, the NZD/USD quotes headed downwards and gained a foothold below 0.6065 on 11 August. At the time of writing, it can be concluded that the New Zealand dollar has been experiencing a gradual decline against the US dollar from January to August inclusive.

Factors influencing the NZD/USD price

Economic data

According to an economic review by the New Zealand Parliament, the country’s economy contracted by 0.1% in Q1 2023. Data for Q4 2022 was revised upwards with the contraction value increasing from 0.6% to 0.7%.

According to Stats NZ, in Q1 2023, 9 out of 16 industries saw a decline in economic activity, with the business services sector shrinking by 3.5%. It is worth noting that the country’s economy has been contracting for the second consecutive quarter.

This is primarily driven by high inflation. For example, prices of fruits and vegetables rose by 18.4% over a year, while prices of meat, poultry, and fish added 11.7% with inflation on food products remaining over 12%. According to economists, other reasons include reduced consumer spending and a weakening real estate market.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

USD/JPY Forecast: Is the Japanese Yen’s Decline Set to Persist?

Dear Clients and Partners,​

USD/JPY ranks among the top three most traded currency pairs in international trading. In this article, we will examine the key factors affecting the USD/JPY exchange rate, analyse the dynamics of price changes in 2023, and explore the short-term and medium-term forecasts provided by experts.

Overview of the USD/JPY currency pair

The base currency in this pair is the US dollar (USD), the official currency of the US. In addition, it serves as the global reserve currency in international trade and financial markets. The US dollar is considered a benchmark currency and the most widely used asset in transactions worldwide. The Federal Reserve System (the Fed), functioning as the central bank of the US, holds the authority to issue currency.

The second currency in this pair is the yen (JPY), the national currency of Japan. It ranks third by popularity in the foreign exchange market, following the US dollar and euro. The Bank of Japan, the country’s central bank, holds the exclusive right to issue banknotes and coins.

The USD/JPY exchange rate shows how many Japanese yen the market gives for one US dollar. Fluctuations in the pair exchange rate reflect the comparative state of the current economic conditions in the US and Japan. USD/JPY is one of the major currency pairs, known for its high liquidity. Together with EUR/USD and GBP/USD, it ranks amongst the top three most traded currency pairs in the foreign exchange market, accounting for approximately 13% of the total trading volume.

Key trading characteristics of the USD/JPY pair

• The currency pair is traded round the clock from Monday to Friday, with significant trading volumes during the Asian and American sessions, leading to major movements for USD/JPY
• The pair is characterised by moderate average daily volatility within the range of 700-800 pips. However, during times of stock market declines, it has the potential for strong movements exceeding 2,000 pips per day
• The spread for USD/JPY is considered minimal thanks to its high liquidity and moderate volatility

USD/JPY movements in 2022-2023

In 2022, the US dollar was greatly supported by steady growth of the key interest rate in the country and strengthened significantly against the yen. The pair rose from 115.00 to 152.00, which was the highest reading over the last 32 years. After the price hit a high of 152.00 at the end of 2022, a downward correction followed, which was caused by expectations of the potential tightening of the Bank of Japan’s monetary policy.

In 2023, the weakening of the yen exchange rate against the US dollar persisted with the currency pair trading at 130.00 at the beginning of the year. The yen is under pressure due to the lack of clear signals from the Bank of Japan indicating when the tightening of the monetary policy will start, which contributes to further growth of the USD/JPY quotes.

At the same time, the Fed continued its interest rate hiking policy in response to increasing inflationary pressure. The difference between the rates resulted in the further weakening of the yen and the gradual growth of the pair exchange rate. On 16 August, at the time of writing, the quotes managed to rise above the local daily high of 145.00.

USD/JPY technical analysis

USD/JPY has been showing steady growth since January 2023, moving in the ascending daily channel. In early July, the price demonstrated a sharp downward reversal from the upper boundary of the channel and the resistance level at 145.00, where there was the 61.8% Fibonacci retracement level from the previous fall. Following this, the quotes rebounded from the lower boundary of the channel and continued to rise.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team