RoboForex - Forex Broker: overview and news

RoboForex receives "Best Trading Conditions" and "Best Partner Program" awards

Dear Clients and Partners,

We are delighted to inform you that RoboForex has received awards in two prestigious nominations from influential media outlets. The company won the "Best Trading Conditions" title at the International Business Magazine Awards and the "Best Partner Program" accolade from the World Economic Magazine Awards.
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S&P 500 Forecast for 2024: Can the Index Hit 5,000?

Dear Clients and Partners,​

On 29 November 2023, we looked at the popular stock index S&P 500 (US500), examining global economic factors influencing it and potential investment and trading strategies. Based on technical analysis, we assessed the current situation on the index chart and explored analysts' forecasts for 2024.

Overview of the S&P 500

The S&P 500 is one of the world’s most widely used stock indices, comprising 500 of the largest companies traded on US stock exchanges. It was created on 4 March 1957 by Standard and Poor’s, now known as S&P Global Inc.

Companies in the index basket represent various economic sectors and industries, making the S&P 500 a crucial gauge for assessing the US stock market.

The S&P 500 eligibility criteria

• Market capitalisation is greater than or equal to 14.5 billion USD
• At least 50% of shares should be available for public trading
• Stocks should be traded on the NYSE or NASDAQ
• The company should have a primary listing on a US stock exchange, comply with US securities laws, and generate at least 50% of its income in the US
• Operations for the last four quarters should be profitable

The list of the S&P 500 companies is revised every quarter. If, for any reason, a corporation no longer meets the above criteria, it is replaced with another company.

Looking back: the S&P 500 performance in recent years

According to TradeThatSwing, the average annual return for the S&P 500 from September 1973 to September 2023 inclusive is 10.75% if unadjusted for inflation and 6.59% if adjusted for inflation. From 1998 to 2022 inclusive, the maximum index return of 30% was recorded at the end of 2013. The minimum value for the same period was seen at the end of 2008, standing at −38%.

The average annual return for the S&P 500 from September 2018 to September 2023 inclusive reached 10.49% if unadjusted and 7.28% if adjusted for inflation. It can be assumed that the index value could have been higher if stock performance in 2020 were not characterised by the high volatility caused by the COVID-19 pandemic. In addition, it was negatively affected by both a bearish market and a high inflation level in 2022.



Global economic factors influencing the S&P 500

• The Federal Reserve’s monetary policy. Interest rate changes may impact borrowing costs for companies, affecting profits and investment decisions
• Global economic growth. This usually has a positive impact on companies’ profits and contributes to index growth
• Exchange rates. The strengthening of the US dollar may adversely affect profits of US companies with a significant share of global operations
• Corporate reporting. Positive quarterly and annual reports may drive up stocks of the S&P 500 companies, creating favourable conditions for index growth
• Important political events in the country. For example, tax reforms or regulation changes may have a substantial effect on the stock market, and hence the index
• Energy source prices. Changes in oil and gas prices may affect the energy sector, and index quotes

Read more at R Blog - RoboForex

Sincerely,
The RoboForex Team

What is CFD and Its Difference from a Real Asset?

Dear Clients and Partners,​

Are there any beginners, who haven’t asked themselves a question what a CFD is and how it is different from a real asset? Let’s go deeper in these terms and try to determine which one of them is more interesting and easier-to-use for both beginners of stock exchange markets and experienced investors.

What is CFD?

First of all, one should know what CFD stands for. CFD means a Contract for Difference. As a matter of fact, it is an instrument traders can use for trading or speculating in price differences, but without buying a base asset, stocks, metals, or commodities.

Trading on the stock market

Now, let’s compare trading stocks and CFDs. In order to participate in trading stocks, a trader has to open an account. In this case, the leverage value will be 1:20, at most. This, in its turn, means that traders with small deposits will have limited opportunities for trading.

Usually the minimum contract size on stock exchange markets is 1 lot, which is 100 stocks. For those, who would like to use smaller contract sizes, in R StocksTrader, the multiasset trading platform the minimal contract size is 0.01 lots - 1 stock. The maximum contract size is limited only by the amount of funds on a trader’s account or the number of traded stocks. It’s quite easy to calculate how much money a trader requires for trading, if, for example, a stock of one popular social network costs 181 USD. Margin requirements for 1 lot (100 stocks) will be 181 * 100 = 18,100 USD.

With small deposits, there will be no opportunities for opening this position. But this is just one of the many examples. However, on stock exchange markets one can find stocks at the price from 0.01 USD, that’s why there are a lot of options for trading even if there is insufficient money for expensive stocks. Apart from this, one should take into account the platform expenses (so called monthly fee) and the commission to be paid to a broker for every opened and closed positions (on average, a trader will spend on this about 4,000 USD a year). Holding positions overnight is free at some of the brokers, but some of them make traders fulfill some certain conditions.

Corporate actions

In case of trading stocks, there are both expenses and some positive moments. For example, cash dividends, because a trader acts as a shareholder with the right to vote at the company’s meetings (for this, a trader has to fulfill some certain conditions). However, in most cases, trading is speculative and has no goals to receive dividends or to take part in shareholder meetings.

One should know that there are some restrictions in trading. Not all stocks are available for credit sale; sometimes, there is no access to open a short position, especially if a trader hasn’t got this asset.

Trading CFDs

Now it’s time to talk about Contracts for Difference. In this case, brokers usually provides bigger leverage values than for trading stocks. Everyone decides for themselves whether it’s good or bad, but increased leverage values allow traders to expand the list of available trading instruments.

An opportunity to trade, both buy and sell, without any restrictions. If a trader buys some trading instrument, but the instrument price falls contrary to expectations, CFDs offers an opportunity of hedging. Trading Contracts for Difference doesn’t imply buying/selling a base asset. Quotes of CFDs and base assets are usually the same, but sometimes there may be 1-2 pips difference due to the internet connection speed. CFDs can be traded through “Forex” terminals, which are usually provided for free. However, trading hours for both CFDs and base assets are the same. The minimum contract size for CFDs, unlike stocks, is 0.1 lots, while the maximum size is limited only by opportunities traders have.

Read more at R Blog - RoboForex

Sincerely,
The RoboForex Team

How to Trade with Leverage

Dear Clients and Partners,​

What is Leverage

Leverage means the ratio between the money you own and that borrowed from the broker. Different brokers offer different leverage sizes, which also depend on the market you are trading. On Forex, you can easily find brokers offering up to 2000:1 leverage, and there's one that claims to offer unlimited leverage to its clients. In the stock market, meanwhile, you'd barely come across a broker that offers over 20:1 leverage.

Leverage in Forex

Leverage got especially popular in Forex, as it is less volatile, and one needs to have their funds leveraged in order to boost the performance, and, subsequently, the profits. The EUR/USD, for instance, moved just 1.10% in May, which would have returned you a 1.10% profit without leverage (1:1). Over the same period, Tesla yielded 14% profit to the shareholders. This way, once the Forex brokers stop offering leverage, the gains in the market will get ridiculously small for the retail traders, and those will have to move the money elsewhere.

How to Get Leverage

A broker will grant you leverage once you deposit your own funds on your account with that broker. Those funds are called margin, and they act as collateral for the loan money you get from the broker. Every broker has its own minimum deposit limit; in many cases, it is as little as $10. Some even don't require any: you just get a welcome bonus, 'free money' that acts as margin.

Leverage and Expenses

When trading with a broker, you as a trader always have to pay commissions on every trade you make. The commission or fee may be priced in spread or may be paid apart. Besides, when rolling a position overnight, you will have to pay the swap. Without leverage, those fees can be barely seen in the statement, but when you do use leverage, they become a few times larger. Let's assume you open a USD/JPY trade with a 1:1 leverage and a $1,000 deposit. With the smallest lot size, 0.01, and a spread of 1.90 pips, you get a ridiculous $0.17 fee. Once you have moved to a 100:1 leverage, however, you will be able to open a 1-lot position, and, considering this, the fee will increase to as much as $17.48. Thus, larger leverage leads to larger expenses.

Advantages of Leverage

Leverage is so much popular in Forex because, without it, you won't earn as much in Forex as in stock market over a certain time frame. Leverage increases the capital you can operate, thus boosting your performance and ROI. Look at the above example: suppose you opened a EUR/USD trade on May 1 and closed it on may 31; this would have yielded you 1.10% profit. With Tesla, you would have earned nearly 14 times more. That's why, if you don't use leverage in Forex, you don't want to trade Forex at all!

Leverage Risks

Unfortunately, not every trade results in profit. Sometimes, you will certainly have losing trades, and in this case the leverage will magnify your losses. Say, you went long on EUR/USD with a $1.200 deposit, the price is 1.1200, and your lot size is 0.01 (micro lot), each pip thus costing $0.10. Then the price fell to 1.190, and in case you decide to close your position, your loss will be as little as one dollar! With 100:1 leverage, this would be a different story. You would have most likely gone one lot, and a 10-pip fall will now cost you as much as $100. Your profit and loss size, therefore, is strictly bound to the leverage size; with more leverage, you earn more and you lose also more!

Read more at R Blog - RoboForex

Sincerely,
The RoboForex Team

Types of Financial Instruments

Dear Clients and Partners,​

On financial markets, no matter when, while working there or just getting to know them, investors will surely face such things as financial instruments. What are they? We’ll paint it in details.

Financial instruments

Financial instruments imply a wide range of terms and definitions. It’s very easy to see how numerous they are: they include a category of banking tools, a group of market assets, and a lot of other financial operations that many people have heard of, but only few have really seen and used them.

All financial instruments can be roughly divided into two main groups: the first group is available to everyone without any exceptions, while the second one requires particular knowledge and skills. As a result, the first group will contain credits, loans, bank deposits, and leasing.

Credits and loans

Credits and loans are the most widespread financial instruments for citizens. The only thing that may really compete with them is a bank deposit. A credit is an operation when a lender grants money to a borrower at a certain interest. The money, of course, is subject to return according to the agreement. As the years go by, global lending terms are getting “milder”, because banks are competing to retain customers, thus offering them better conditions. However, in developing economies it doesn’t work this way: in most cases, the rate on credit is a primary source of banks’ revenue.

Bank deposits

Bank deposits are another widespread financial instrument, which doesn’t imply any in-depth knowledge. In this case, a bank acts as a borrower and pays interests to a lender (an individual) for using their money after a specified period of time is over. The deposit rate is calculated based on the value of the country’s key interest rate, but sometimes there are other possible options.

Leasing

Leasing is a more complicated financial instrument, but it’s quite available for citizens. Leasing agreements have 3 parties: after concluding an agreement, a lessor gets a long-term asset, a lessee undertakes an obligation to pay money on account of debt repayment, while a distributor of a property or equipment sell their products.

Now let’s talk about the second group of financial instruments, which is related to trading on financial markets and speculations of different types. In this case, speculations mean investment in high-risk assets with a possibility of a large income.

Stocks and bonds

So, what are stocks and bonds? A stock is an ownership share. After buying stocks on financial stock exchanges, an owner is guaranteed the right to receive dividends. A bond is an issued security similar to a stock, but with the attached right to receive its nominal value or money, or their equivalent within the time specified. A bond is a debt security. When it comes to risk, stocks are considered more risky financial instrument, while bonds – more conservative.

Futures

Then come derivative instruments. In other words, these are assets that are based on a basic concept, but the instruments themselves are pretty specific tools. Futures are derivative financial instruments based on the SPA of an asset (stocks, good, etc.), and when entering into the agreement parties agree only on the price and the delivery date. Other parameters are usually quite standard and defined by specifications. Futures are trade offers, which are traded on the market on a regular basis.

Read more at R Blog - RoboForex

Sincerely,
The RoboForex Team

How to Use Stop Loss and Take Profit: Learning to Place Orders to the Charts

Dear Clients and Partners,​

The Stop Loss and Take Profit orders act as insurance, being reverse orders in essence. If, for example, a pair was bought, when an Stop Loss or a Take Profit is triggered, a reverse trade (selling) is carried out, locking in profit (if the TP is triggered) or Loss (if the SL is triggered).

What is Stop Loss and Take Profit?

A Stop Loss (SL) is a protective order that limits possible losses of the trader in an open position. It automatically closes the trade when a certain level or amount of losses is reached. A Stop Loss is placed either to limit losses or to lock in profit. In the latter case the order is placed in the profitable area.

A Take Profit (TP) is an order locking in profit without the trader’s participation. The order automatically closes the trade when the price reaches a certain level.

Both Stop Loss and Take Profit must be placed in accordance with the trader’s strategy. For your trading to be stable and successful, these orders are obligatory. The Stop Loss minimizes losses and enhances risk management.

Almost all trading strategies include the use of an Stop Loss and/or a Take Profit. Each trader has their own criteria of money management (MM) that tell them how much they can afford to lose in each trade. This is the strategy telling where to place an SL and a TP.

How to place a Stop Loss?

The trader defines how much they can lose, according to the MM, if something goes wrong. The strategy tells them where the Stop Loss should be.

Placing Stop Loss and Take Profit in a Pin Bar strategy

The trader is using the Pin Bar strategy. At the top of an ascending impulse, there has formed a Pin Bar pattern, and the trader is planning to open a selling trade. In this case, an Stop Loss will be placed behind the maximal value of the signal candlestick. The landmark for a Take Profit is the nearest support level. The possible profit to loss ratio in this case is 3:1. In the first picture, you can see where the SL and TP must be placed by the trading strategy.



The Stop Loss is usually calculated in points from the entry to the trade, accounting for the sum of affordable losses, expressed in the basic currency of the deposit. The trader must calculate the price of a point and then place the volume. For example, the Stop Loss is 40 points, the available loss is 100 USD; 100 USD/40 pips = the price of a point is 2.25 USD. Hence, the size of the trade is 0.25 lot.

With risk management, the trader can control risks. For example, if they receive a signal with a profit to loss ratio of 1 to 1, the trader should think twice before entering this trade. An optimal profit to loss ratio is no less than 3 to 1.

Placing Stop Loss and Take Profit in a Pin Bar strategy - 2

In the picture, we can see a complete Pin Bar, and if we calculate the trade by the strategy, we will see that the nearest support level is as far away as the Stop Loss, which gives a 1:1 ratio. So, we can filter out this signal as it does not comply with the MM.



How to place Stop Loss and Take Profit automatically?

At present, there are a lot of programs for the trader to live easier. While before the Stop Loss and Take Profit were to be placed manually, and if they were to be changed, the trader had to modernize the order in several steps, nowadays, the things have become much simpler. It is enough to left-click the order on the chart and drag it to the desired price level. Depending on the direction in which the order was moved, an SL or a TP will be placed.

There are scripts and expert advisors that automatically place the Stop Loss and Take Profit levels by the set criteria for each new order. On the Net, you can find an advisor called Auto-MM with a short user guide, which calculates the trade volume and automatically places the Take Profit and Stop Loss.

Read more at R Blog - RoboForex

Sincerely,
The RoboForex Team

RoboForex: upcoming changes to the trading schedule in view of the Christmas and New Year holidays

Dear Clients and Partners,

We are informing you about the upcoming adjustments to the trading schedule during the Christmas and New Year holidays.

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

MetaTrader 4 / MetaTrader 5 platforms

Schedule for trading on DE40Cash

• 25 December 2023 – no trading
• 26 December 2023 – no trading
• 1 January 2024 – no trading

Schedule for trading on CFDs on US stocks

• 24 December 2023 – trading stops at 7:00 PM server time
• 25 December 2023 – no trading
• 1 January 2024 – no trading

Schedule for trading on CFDs on US futures

• 25 December 2023 – no trading
• 26 December 2023 – trading starts at 10:00 AM server time
• 1 January 2024 – no trading

Schedule for trading on CFDs on Metals, CFDs on Oil, and CFDs on US indices

• 25 December 2023 – no trading
• 26 December 2023 – trading starts at 10:00 AM server time
• 1 January 2024 – no trading
• 2 January 2024 – trading starts at 10:00 AM server time

Schedule for trading on other instruments

• 25 December 2023 – no trading
• 26 December 2023 – trading starts at 10:00 AM server time
• 1 January 2024 – no trading
• 2 January 2024 – trading starts at 10:00 AM server time

R StocksTrader platform

Schedule for trading on GER40

• 25 December 2023 – no trading
• 26 December 2023 – no trading
• 1 January 2024 – no trading

Schedule for trading on US stocks, CFDs on US stocks, ETFs, and CFDs on ETFs

• 24 December 2023 – trading stops at 7:00 PM server time
• 25 December 2023 – no trading
• 1 January 2024 – no trading

Schedule for trading on CFDs on Metals, CFDs on Oil, and CFDs on US indices

• 25 December 2023 – no trading
• 26 December 2023 – trading starts at 10:00 AM server time
• 1 January 2024 – no trading
• 2 January 2024 – trading starts at 10:00 AM server time

Schedule for trading on CFDs on US futures

• 25 December 2023 – no trading
• 26 December 2023 – trading starts at 10:00 AM server time
• 1 January 2024 – no trading

Schedule for trading on CFDs on EU and UK stocks and indices

• 25 December 2023 – no trading
• 26 December 2023 – no trading
• 29 December 2023 – no trading on CFDs on DE and UK stocks
• 1 January 2024 – no trading

Schedule for trading on other instruments

• 25 December 2023 – no trading
• 26 December 2023 – trading starts at 10:00 AM server time
• 1 January 2024 – no trading
• 2 January 2024 – trading starts at 10:00 AM server time

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

Sincerely,
The RoboForex Team

Join the grand promotion for Partners with a total prize pool of $1,000,000

Dear Clients and Partners,

Let us remind you that all RoboForex partners can participate in our grand promotion and win cash prizes.

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• From June 2023 to March 2024, all RoboForex Partners are eligible to win cash prizes through automatic monthly coupon distribution during this promotion.

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Earn with RoboForex and receive prizes!

Sincerely,
The RoboForex Team

EUR/GBP 2024 Forecast: Analysis and Expert Predictions

Dear Clients and Partners,​

In-depth analysis of the EUR/GBP currency pair

The EUR/GBP pair is the cross rate of the two popular currency pairs, EUR/USD and GBP/USD. A cross rate is the price of one country’s currency expressed in another country’s currency and determined through their values against a third currency – the US dollar, traditionally considered the primary international reserve currency.

The EUR/GBP exchange rate reflects the dynamics of the value of the common European currency (EUR) against the British pound sterling (GBP). In this pair, the euro is the base currency, and the current price reflects how many pounds are needed to buy or sell one euro. When the pair’s quotes go up, it indicates a strengthening euro, and when they drop, it signifies a weakening euro against the UK currency.

Trading characteristics of the EUR/GBP pair

• The pair is traded round the clock from Monday to Friday inclusive, with the highest activity observed during the European and American trading sessions
• The EUR/GBP pair shows a low average daily volatility of approximately 500 pips
• Thanks to its popularity, high liquidity, and moderate volatility, the spread for this pair is minimal, ranging from 3 to 5 pips in a quiet market

Critical factors influencing the EUR/GBP pair in 2024

The role of the Bank of England’s monetary policy

The primary tool the UK central bank uses to regulate inflation and influence the exchange rate of the national currency is the implementation of changes in the key interest rate. If the interest rate increases, the pound sterling exchange rate strengthens against other currencies, while a decrease in the interest rate leads to a decline in the exchange rate. Since December 2021, the Bank of England has executed a series of interest rate hikes to curb high inflation.

The rate increased from 0.1% to 5.25% during this period. The Bank of England’s Monetary Policy Committee aims to achieve a 2% inflation target. Thanks to interest rate increases, inflation rates are slowing down in the second half of 2023, with the regulator pausing its interest rate hikes since August. While consumer inflation fell from 10.5% in January to 4.6% in November, it is still above the central bank’s target.

Further actions on interest rate changes in 2024 will depend on economic data, primarily on inflation rates. If the UK’s GDP declines and recession signs emerge, this may negatively impact the pound exchange rate, with the EUR/GBP pair receiving support for growth. Conversely, strong GDP growth and high inflation might prompt the regulator to raise the interest rate again, bolstering the pound sterling against the euro.

EU monetary policy and its effects on EUR/GBP

The European Central Bank’s monetary policy strongly impacts the EUR/GBP pair. For example, interest rate hikes in the eurozone contribute to strengthening the euro exchange rate against the pound. The regulator has been implementing a series of tightening measures in its monetary policy since July 2022 to curb rapidly rising inflation. During this period, the interest rate increased from 0% to 4.5%, with the latest (at the time of writing) hike of 0.25% in September 2023.

Consumer inflation in the eurozone is exhibiting signs of a slowdown in 2023: while the rate reached 10.1% in January, growth in November was just 2.4%. The ECB focuses on attaining a 2% inflation target. The regulator is currently pausing its interest rate hike series in response to slowing European inflation rates.

Technical analysis and predictions for EUR/GBP in 2024

After rebounding from the annual low of 0.8500 in July-August 2023, the EUR/GBP currency pair is experiencing upward momentum within an ascending local price channel on the daily chart. At the time of writing, the pair underwent a downward correction towards the channel’s lower boundary, forming a local support level at 0.8550.

If this support level does not break, the pair will likely continue its upward movement to the upper boundary of the ascending channel at 0.8800. Should the quotes fall below 0.8550, the ascending scenario will probably be cancelled, with the price potentially declining to the annual low of 0.8500 and further to 0.8350. The SMA (200) and Alligator indicators suggest a local downward impulse of the price movement.

Read more at R Blog - RoboForex

Sincerely,
The RoboForex Team

Candlestick Analysis: 24 Main Candlestick Patterns

Dear Clients and Partners,​

On all financial markets, the price of an asset is reflected as a price chart, constantly changing during the trading session in accordance with demand and supply.

What is a candle?

A candlestick is a way of displaying information about the price movement of an asset. The candlestick chart is one of the most popular components of technical analysis, allowing traders to quickly and easily interpret price information from multiple price bars.

A candle has three main parameters:

• The body of the candle, representing the opening-closing range.
• A wick or shadow indicating the daily high and low.
• A color that shows the direction of the market - a green (or white) body indicates an increase in price, and a red (or black) body indicates a decrease in price.

Over time, individual candles form patterns that traders can use to recognize major support and resistance levels. There are so many candlestick patterns that indicate opportunities in the market - some give an idea of ​​the balance between buying and selling pressure, while others identify continuation patterns or market hesitation.

Before you start trading, it's important to familiarize yourself with the basics of candlestick patterns and how they can inform your decisions.

Types of Japanese candlesticks

Let us now look at the types of Japanese candlesticks: some may lack bodies or shadows, some may have just one shadow. By shape, candlesticks are divided into:

• Normal (without anomalies).
• Marubozu (long shadowless bodies).
• Dojis (line-like bodies, where the opening price coincide with the closing price or is very near to it).

Depending on the place of forming, candlesticks will have different names, though they will look roughly the same. At the same time, there are candlestick patterns which name do not depend on the place of formation. Based on these parameters, candlestick patterns may be divided into several groups:

• Reversal candlesticks at the top of the trend
• Reversal candlesticks at the bottom of the trend
• Continuation candlestick patterns
• Candlestick patterns that can form either at the top or at the bottom of the trend, its name remaining the same

Types of patterns in candlestick analysis

Candlestick patterns formed at the top of a trend

Now let us discuss the conditions for the formation of the aforementioned patterns and look at the pictures.

Candlestick patterns, formed at the top of the trend, are normally preceded by a long-time directed upward movement.

Shooting Star

A Shooting Star pattern has a small body and a long shadow along with the trend. The second shadow is either too small or lacking.

Read more at R Blog - RoboForex

Sincerely,
The RoboForex Team