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[Vlad RF]

How to Trade with Bulls Power and Bears Power Indicators?

Author: Victor Gryazin

Dear Clients and Partners,​

This article is devoted to using two indicators: Bulls Power and Bears Power – in financial markets. These indicators are meant for measuring the strength of trends.

How do Bulls Power and Bears Power work?

These indicators were created by a famous trader and the author of the book “Elder Triple Screen” Alexander Elder. They help estimate the current power balance of buyers and sellers and catch the moment when bears/bulls are getting weaker. The combination of these indicators is also known as the Elder Ray.

Bulls Power demonstrates the strength of bulls in the market. It compares the highs with the Exponential Moving Average. If the Bulls Power histogram is above zero and growing, this means buyers are holding the price above the EMA, and bulls are now stronger than bears. And vice versa, if the histogram is declining, dropping below zero, this indicates the predominance of bears.

Bears Power, in its turn, demonstrates the strength of bears in the market. It compares the lows with the EMA. If the Bears Power histogram is below zero and declining, this means sellers are holding the price below the EMA, and bears are now stronger than bulls. However, if the histogram starts growing and rises above zero, this means bulls are in control of the market.

In essence, Bulls Power and Bears Power are irregular oscillators. They appear in separate windows under the price chart. They look like bar histograms with the central line at zero. To determine the direction of the active trend, Elder recommends adding to the chart an EMA (13), drawn by close prices.

Installing and setting up the indicators

Bulls Power and Bears Power are included in many popular trading terminals. To install the indicator to the chart of your financial instrument in MetaTrader 4 or MetaTrader 5, go to the Main Menu: Insert/Indicators/Oscillators/Bulls Power and Bears Power.

The formulae of the indicators look as follows:

• Bulls Power = HIGH - EMA (13)
• Bears Power = LOW - EMA (13)

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the RoboForex company's project called ContestFx invites everyone to participate in the following competition:

The 123rd competition of "Demo Forex" is running its second week.
The 314th competition of "Week with CFD" has kicked off today.
447th competition of "Trade Day" will start on 16.06.2021 at 12:00.
363rd competition of "KingSize MT5" will start on 17.06.2021 at 20:00.

If you haven't become a participant in our competitions yet, you need to go through a simple registration procedure just once. After that, any of your desired competitions will be available to you 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]

MACD – Trading the Trend Strategy

Author: Andrey Goilov

Dear Clients and Partners,​

This trading method using Moving Averages works well with strong market movements. You must have already heard that trading the trend usually yields brilliant results; and if you add an oscillator, you get a full-scale trading strategy.

An indicator-based strategy is attractive because it has strict entry and exit rules. And if the trader uses graphic analysis, they usually have to analyze charts looking for price patterns, as well as subjectively evaluate the market situation.

Today, I will be telling you about a strategy used on M30 and H1. It allows placing close Stop Losses and trading intraday.

About the strategy MACD – Trading the Trend

The strategy is based on three Moving Averages, and MAs are the best indicator showing the market trend. Knowing the trend, you will know the direction of your work. As an additional signal source, the MACD is used. The strategy suits GBP/USD, AUD/USD, EUR/USD.

Parameters of the trading strategy

The strategy demonstrates the best results on H1 and M30. To get started, prepare the chart and add some indicators with certain parameters.

• MA (85) is a Linear Weighted MA with period 85, apply to: Low, color: blue.
• MA (75) is a Linear Weighted MA with period 75, apply to: Low, color: dark-blue.
• MA (5) is a Linear Weighted MA with period 5, apply to: Low, color: yellow.
• MACD (15, 26, 1) is the MACD with fast EMA (15), slow EMA (26), MACD SMA – 1.

A signal to buy by the strategy

The main signal to open a trade is a breakaway of the two slow MAs by the fast one, while the MACD will be used as an extra filter. The crossing of two MAs is a simple signal for a change of the trend. In this case, we expect a downtrend to come to an end and an uptrend to start, which means it is time to buy.

The parameters for entering a buying trend are as follows:

1. The MA (5) crosses the MA (85) and (75) from below, signifying a change of the trend.
2. The MACD values are above zero, indicating the presence of an uptrend.

Let us study an example with the currency pair NZD/USD. We see that the price was resting below the slow MAs, indicating a downtrend, but at some point it broke through the MAs, then the fast MA did the same, aiming upwards, indicating a change of a downtrend for an uptrend.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

How to Trade Hanging Man and Inverted Hammer?

Author: Victor Gryazin

Dear Clients and Partners,​

This overview is devoted to two reversal patterns from candlestick analysis — the Hanging Man and Inverted Hammer. Appearing on the chart, the patterns might precede a correction or reversal.

How do the patterns form?

The Hanging Man and Inverted Hammer are candlestick analysis patterns. Candlestick analysis began in Japan, and Steve Nison, famous trader and analyst, became its active apologet. Being informative and very visual, candlestick analysis is fairly popular among traders.

How the Hanging Man forms

The Hanging Man reversal pattern forms at the price's highs after an ascending movent. The pattern looks like a candlestick with a small body (the color does not matter) with a small upper shadow or none at all — and an extremely long lower shadow, at least double the size of the body. The Japanese must, indeed, have seen the figure of a hanged person in this pattern and thus gave it such a grave name.

The idea of the Hanging Man is as follows. At some point, a massive sale of the asset happens; then buyers try to get the quotations back to the highs, which is indicated by the long lower shadow. A dubious moment comes: bears are active and ready to counter-attack but bulls still have the vigor and hope to win the battle.

The clue to who will win is the manner in which the candlestick following the Hanging Man closes. If this is a bearish candlestick with the close price below the Hanging Man's body, this means the reversal pattern has formed fully, so we may count on further falling. Otherwise, if bulls manage to close the day in their own favor, the pattern is not considered confirmed: the reversal signal is canceled, and the uptrend is likely to continue.

How the Inverted Hammer forms

The Inverted Hammer reversal pattern is a mirror reflection of the Hanging Man. It appears at the lows of the price chart in a downtrend. The pattern is a candlestick with a modest body (the color does not matter), with a small lower shadow or no shadow at all — and a very long upper shadow, at least twice as long as the body. It resembles a hammer with its handle looking up, which, naturally, gave the pattern its name.

The pattern works the following way. In a downtrend, active buying bursts out at some point, which is confirmed by the long upper shadow of the candlestick. The market becomes uncertain: bulls try to capture the in

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex receives the “Best Mobile Trading App (Global)” Award from "Global Forex Awards 2021 - B2B"

Dear Clients and Partners,​

RoboForex has won a prestigious annual award from Global Forex Awards 2021 - B2B in the “Best Mobile Trading App (Global)” nomination. The winners were announced on June 4th, 2021. We’d like to thank everyone who voted for us!

We realize that in the modern world many traders appreciate mobility and the opportunity to trade not only from their desktop computers but also using smartphones at any time and any place. Therefore, we continue developing this area and try to make our application, R MobileTrader, better and more comfortable for our clients every year.

R MobileTrader is a comprehensive mobile workstation for traders with a set of intuitive management tools, access to analytics and forecasts, the opportunity to perform trading operations, deposit and withdraw funds. In case the clients have any questions, they can contact our multilingual 24/7 Live Support through the application at any moment.

​

Start trading through the best application according to "Global Forex Awards 2021 - B2B" right now and see for yourself that it's worth this title!

​

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project invites you to take part in the following demo competitions:

The 123rd competition of "Demo Forex" has gained "cruising speed".
The 315th competition of "Week with CFD" has just started.
At 12:00, June 23rd, 2021, starts the 448th competition of "Trade Day".
At 20:00, June 24th, 2021, starts the 364th competition of "KingSize MT5".

We remind you that by winning in our competitions, any of you can become the owner of the prize received to your real trading account, using which you'll be able to make a profit in the Forex market without investing your personal savings required as an initial deposit.

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

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Trade in Forex during Crises?

Author: Maks Artemov

Dear Clients and Partners,​

In times of crises in the gloval or local economy, traders have only questions: how to trade and make money? Should one pay attention to currency pairs — or invest in protective assets, such as gold, right away? Which trading strategies to use?

Before answering these questions, let me remind you that Forex, unlike, other markets, always feature liquidity and volatility. If the stock market might be experiencing certain lull, currency pairs keep trading all the time, and in crises, they are almost always in trends (ascending or descending). However, even this rule has exceptions.

The next idea should neither be news to you: trading in crises, especially in a highly volatile market, implies increased risks. They will also be touched upon in this article.

And now let us look at some examples of how crises can influence currency prices and how we can use it in trading.

Types of crises and examples of trading

A crisis can emerge at the global level (the COVID-19 pandemic is a good example) as well as at the local one. One example of the latter type is natural disasters.

Such events cause damage to the infrastructure and people's homes, goods supply, transport, and manufacturing. As a rule, the country becomes unable to produce and export goods because it spend all of its resources on recovery.

In most cases, the country's national currency starts falling. This gives a chance to sell pairs containing this currency. However, the beginning of such falling, not to mention its end, is rather hard to predict. The currency might even not react to the natural disaster.

Let us look at the example of AUD/USD and GBP/USD during floods in Australia and Great Britain in March and June 2012. While the Australian dollar demonstrated a serious slump, the pound remained in a flat.

AUD/USD chart during the flood in Australian in March, 2012

GBP/USD chart during the flood in England in June 2012​

The movements of national currencies depend on the scale of the disaster and the country's readiness to cope with the consequences. As seen on the charts below, we cannot always evaluate these factors fully. It seems that in such circumstances, the only reliable strategy is scalping or intraday trading. However, sometimes in crises, the market allows to trade medium and long run. In the end, everything depends on the trader’s ability to assess the macroeconomic situation correctly.

As one example, take the debt crisis of Europe in 2009-2010. The trigger was the economic crisis in Greece, and market panic ragged the common European currency down. At that tie, the euro lost up to 20% of its price.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

How to Become a Day Trader?

Author: Andrey Goilov

Dear Clients and Partners,​

Traders can be compared to drivers: some drive fast, while some move around in no hurry. Beginners face some engine malfunctions in the middle of traffic and freak out when having to drive at the countryside. Some enjoy driving at night while for others, such driving is a challenge.

There are as many trading options as driving experiences in the example above. Some trade intraday, some prefer week charts and wait for their trades for months, while stock investors can wait for their profit for years.

This article is devoted to day traders - those who try to squeeze all the juices out of the market over a short time.

Who is a day trader?

A day trader is a one who makes a lot of trades during the day to make maximum profit on short-term market fluctuations. As a rule, positions are held for several seconds to several hours but are always closed before the end of the day not to transfer risks to the night-time or non-working hours of the platform.

How to become a day trader?

Trading intraday needs knowledge, experience, emotional stability, and the ability to make decisions fast. All this can be acquired with time; however, do not rush at the market right after you learnt some tech analysis or got trained in trading psychology. Only all of these aspects taken together make any sense.

If you want to become a day trader, keep in mind the following:

Practical knowledge

You need an excellent understanding of tech analysis and all instruments used for analyzing graphic patterns, trade volume, and trend direction.

Among the most wide-spread indicators used by short-term traders, there are support/resistance levels, the MACD for divergences, the Moving Average, etc.

Some traders would use ready-made trading systems based on a combination of indicators, while others would trade graphic patterns on small timeframes; a separate category trades based on their experience and instinct.

Day trading: advantages and drawbacks

In the stock market, the advantage of short-term trading is the fact that positions are not influenced by the probability of negative night events that can disturb the price noticeably. Such news might be important profit and losses reports, as well as the information about an increase or decrease in the rating of information agencies. Such news normally emerge before the market opens or after it closes.

Trading currency pairs, the day trader is also insured from drastic price movements against them at night time, when news emerge. The trader's dream will be as calm as ever, and they will not rush at checking the terminal and their trades right upon waking up.

Bottom line

Day trading entails increased psychological load that, however, decreases with time. To be always with a profit, a day trader needs to make a lot of trades every day and trail a lot of trading instruments, have deep knowledge of tech analysis and make trading decisions fast.

Day trading is not a path for beginners, but neither it is an unachievable elite group. Follow its principles, practice on demo accounts, train your psychological stability, and you will succeed.

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 in the following exciting demo competitions:

The 123rd competition of "Demo Forex" has reached the final stage.
The 316th competition of "Week with CFD" has started today.
449th competition of "Trade Day" will start on 30.06.2021 at 12:00.
365th competition of "KingSize MT5" will start on 01.07.2021 at 20:00.

To participate in our free demo competitions, it is enough for you to go through a simple registration procedure, after which participation in any of the chosen competitions will be available to you in just a couple of mouse clicks.

Join us!

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Trade AUD/USD Currency Pair?

Author: Victor Gryazin

Dear Clients and Partners,​

AUD/USD means the Australian dollar vs the US dollar. It is one of For example majors. This article is devoted to factors influencing the dynamics of AUD/USD quotations and get to know trading methods that suit the pair.

Some history

Australia is a young land discovered by European sailors in the 1600-1700s. In 1770, an English sailor and traveller James Cook research Australia, thus beginning it's colonization by Britain. The first British colony on the continent New South Wales was founded on January 26th, 1788. This day later became a national holiday, the Australia Day.

The Australian dollar, a decimal currency, went in circulation on February 14th, 1966, replacing the duodecimal Australian pound. The introduction of a new national currency was initiated by the CB - the Reserve Bank of Australia. The colloquial words for the AUD are Aussie and the Australian.

The Australian dollar is a popular currency that makes up for 5% of global currency trades. Such popularity can be explained by a rather high interest rate in Australia, free currency market, general stability of the economy and political system.

Trading characteristics of AUD/USD

Trading characteristics of the pair are as follows:

• Trading time: the pair trades all day long except weekend but is more active during the Pacific, Asian, and American trading sessions. At the Pacific and Asian sessions Australia publishes important economic news that can influence the pair, while the activity at the American session is explained by the influence of the USD.
• The volatility of the pair is moderate, mostly showing moves of 50 to 70 points. However, in crises, when stock markets are falling, volatility can increase shortly to 100-200 points a day.
• Spread: the pair is a popular major, and thanks to high demand and liquidity, it has minimal spread. On popular ECN accounts, spread is normally below 1 point.

Which factors influence the AUD/USD quotations?

The dynamics of AUD/USD is some kind of an indicator that compares the US and Australian economies. Here are the facts that have the most influence in the currency pair.

Monetary policies of the RBA and Fed

The policies of the Australian and American Central banks have the biggest influence over the pair. If the RBA decides to start a series of interest rate increases, while the Fed will keep the rate at its usual level, the AUD/USD will have a stimulus to grow. And vice versa: an increase in the rates made by the Fed and the lack of such an increase at the Australian side starts a downtrend in the quotations.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex: changes in trading schedule (Independence Day in the USA)

Dear Clients and Partners,​

We’re informing you that on July 5th, 2021 due to the celebration of Independence Day in the USA, there will be some changes in the trading schedule*.

MetaTrader 4 / MetaTrader 5 platforms

Trading schedule on Metals (XAUUSD and XAGUSD), US indices (US30Cash, US500Cash, and USTECHCash), the Japanese index J225Cash, and CFDs on oil (Brent and WTI)

• July 5th, 2021 – trading stops at 7:40 PM server time.
• July 6th, 2021 – trading starts as usual.

Trading schedule on CFDs on US stocks

• July 5th, 2021 – no trading.
• July 6th, 2021 - trading starts as usual.

R Trader platform

Trading schedule on Metals (XAUUSD and XAGUSD) and CFDs on oil (BRENT.oil and WTI.oil)

• July 5th, 2021 – trading stops at 7:40 PM server time.
• July 6th, 2021 – trading starts as usual.

Trading schedule on CFDs on US indices (US30, US500, and NAS100) and the Japanese index (J225Cash)

• July 5th, 2021 – trading stops at 7:40 PM server time.
  July 6th, 2021 – trading starts as usual.

Trading schedule on CFDs on US stocks

• July 5th, 2021 – no trading.
• July 6th, 2021 – trading starts as usual.

Trading schedule on US stocks and ETFs

• July 5th, 2021 – no trading.
• July 6th, 2021 – trading starts as usual.

cTrader platform

Trading schedule on Metals (XAUUSD and XAGUSD)

• July 5th, 2021 – trading stops at 7:40 PM server time.
• July 6th, 2021 – trading starts as usual.

Please, take into account these changes in schedule when planning your trading activity.

* – This schedule is for informational purposes only and may be changed by the provider.

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project invites you to participate in our regular demo competitions:

The 124th competition of "Demo Forex " and 317th competition of "Week with CFD" kicked off on the same day.
450th competition of "Trade Day" will start on 07.07.2021 at 12:00.
336th competition of "KingSize MT5" will start on 08.07.2021 at 20:00.

If you've never participated in our demo competitions, you just need to go through a simple registration procedure, after which participation in any of the chosen competitions will be available to you in just a couple of mouse clicks.

Should you try it? Make up your mind - because you are not risking anything!!

Sincerely,
RoboForex Contest

 

[Vlad RF]

RoboForex: important information regarding NVIDIA stock split on July 20th, 2021

Dear Clients and Partners,​

On July 19th, 2021, NVIDIA Corporation (NASDAQ: NVDA) will have its stock go through a 4 to 1 split.

A stock split is a corporate action, as a result of which the company increases the number of issued shares by a specific multiplier. The value of the portfolio consisting of these shares remains the same.

How it will influence positions and orders?

If you have open positions in NVDA or plan to open such positions, please pay attention to the following changes, which will be effective as of July 20th, 2021:

MetaTrader 4 / MetaTrader 5 real accounts:

• All pending orders (Buy Limit, Buy Stop, Sell Limit, Sell Stop, Buy Stop Limit, Sell Stop Limit, Stop Loss, and Take Profit) in NVDA will be canceled before the trading session starts on July 20th, at 4:31 PM server time.
• The opening price for all positions in NVDA on the account active on July 20th, at 3:00 PM server time will be divided by 4.
• The volume of all open positions in NVDA on July 20th, at 3:00 PM server time will be multiplied by 4.

MetaTrader 4 / MetaTrader 5 demo accounts:

• All pending orders (Buy Limit, Buy Stop, Sell Limit, Sell Stop, Buy Stop Limit, and Sell Stop Limit) in NVDA will be canceled before the trading session starts on July 20th, 4:31 PM server time.
• All open positions in NVDA will be closed before the trading session starts on July 20th.

R Trader accounts

The split procedure will take place on July 20th, at 3:00 PM server time

• During the split procedure, all active pending orders (Buy Limit, Sell Limit, Stop Loss, and Take Profit) in NVDA and NVDA.nq will be canceled.
• The opening price for active positions in NVDA and NVDA.nq opened before July 20th, 3:00 PM server time will be divided by 4.
• The volume of all positions in NVDA opened before July 20th, at 3:00 PM server time will be multiplied by 4.
• If you have at least two open positions NVDA or NVDA.nq in the same direction and on the same account, they will be combined into one new position. This new position will have the opening price and a volume based on an average weighted price of all open positions held before the split.

Pay attention to Expert Advisors (EA)

If you use Exerts Advisors, (EA), we recommend you contact the developers to make sure they will work correctly after the split.

The historical charts of the above-mentioned instruments in your trading terminal will be updated to reflect the new prices. Please, take into account this information when planning your trading activity.

All other aspects of trading conditions shall remain intact.

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex adds 30 CFDs on Brazilian stocks to R Trader

Dear Clients and Partners,​

RoboForex has expanded the list of trading instruments in its innovative R Trader web terminal by making 30 CFDs on Brazilian stocks available for trading with tight spreads and low commissions! The list of new instruments includes such companies as AmBev (ABEV3), Banco Bradesco (BBDC4), Itau Unibanco (ITUB4), Petrobras (PETR4), and Vale (VALE3).

Conditions for trading CFDs on Brazilian stocks

• Commission – from 0.1% (but not less than 10 BRL).
• Spreads – from 0 pips.
• Leverage – up to 1:5.
• Trading time – from 4:10 to 10:55 PM (server time).

In addition to that, RoboForex offers you to trade over 3,000 real stocks and CFDs on stocks of the largest American, British, German, French companies, and others. RoboForex clients have the opportunity to invest in shares of Netflix, Google, Amazon, receive dividends, and participate in corporate actions. 100 USD on your account will be enough to start investing.

Start trading Stocks on competitive conditions right now!



Read more about Stock trading >​

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex gives away $1,100,000 among its clients and partners

Dear Clients and Partners,​

Join the promotion for $1,100,000 to celebrate RoboForex’s 11th birthday! Each month from July 2021 to April 2022, there will be a giveaway of money prizes among traders with Prime account, Partners, and CopyFX Traders with Prime accounts.

Over 500 for the total of $1,100,000

will be given away over 10 months

• 54 winners each month
  The prize pool of each giveaway is $110,000.
  
  
• Up to 3 chances to win
  You can receive one coupon in all three categories each month.
  
  
• Prizes up to $20,000
  Your prize can be immediately withdrawn from the account or used in further trading.

How to join?

Receive Coupons for fulfilling the conditions below. You can participate in monthly giveaways and receive Coupons in all 3 categories.

1. Traders with Prime accounts
Trade with the best conditions: spreads from 0, commission for the trading volume of 1 million USD decreased to 10 USD. leverage up to 1:300.

Conditions for receiving a Coupon:

• Deposit at least 300 USD to your account.
• Perform at least 3* lots of trading operations per month.

* - Only the positions in currency pairs and metals opened in the current month are taken into account

Open Prime account

2. Partners
Attract clients to trade and receive up to 60% of the Company’s revenue.

Conditions for receiving a Coupon:

• Partner commission at month-end is at least 300 USD

Become Partner

3. CopyFX Traders
Earn on your strategies at CopyFX and increase your chances to win a prize.

Conditions for receiving a Coupon:

• Make the Top-30 of the best CopyFX Traders on Prime accounts in the current month.

Open CopyFX Prime account

Join the offer right now, take part in as many giveaways as possible, and increase your chance to win. Good luck!



More about the promotion >​

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 124th competition of "Demo Forex" has gained "speed".
The 318th competition of "Week with CFD" has started today.
451st competition of "Trade Day" will start on 14.07.2021 at 12:00.
367th competition of "KingSize MT5" will start on 15.07.2021 at 20:00.

We remind you that participation in our demo competitions is completely free and all winners receive funds as a reward to their real accounts, so they can use them to perform trading operations on the Forex market without investing their own financial savings required as an initial deposit.

We wish good luck to all of you!!

Sincerely,
RoboForex Contest

 

[Vlad RF]

Top-7 Oscillators for Trading

Author: Victor Gryazin

Dear Clients and Partners,​

Trading indicators have long become useful instruments in traders’ work. This article is devoted to seven popular oscillators that help detect the current market situation and give signals for opening and closing positions.

1. The MACD (Moving Average Convergence/Divergence)

This is one of the most popular oscillators. It was created by a famous trader and analyst Gerald Appel. As the name of the indicator tells us, the indicator is comprised of several MAs with different parameters.

The indicator is calculated in a separate window on the terminal desktop and consists of two lines, one of them presented by a bar histogram. A trading signal is basically a crossing of the two lines or a divergence of their extremes (highs and lows) with the price chart. A divergence might be predicting a correction or even a trend reversal.

2. RSI (Relative Strength Index)

RSI is a normalized oscillator. The developer and popularizer of the indicator is J. Welles Wilder.

RSI shows the position of current prices compared to the previous period. It has become a great option for trading flats as it shows how much the price has deviated from its average.

RSI is displayed in a separate window under the chart of your asset. Trading signals are generated by levels 30, 50, and 70. The area above 70 is called overbought. There signals to sell appear. The area below 30 is called oversold, and there signals to buy emerge. If there is a bright trend in the market, use RSI by the trend only.

3. The Stochastic Oscillator

The Stochastic Oscillator was created by a famous trader George Lane. He noted that prices move in some sort of cycles: going from one level to another, it sometimes becomes in turns oversold and overbought. The Stochastic shows whether buyers and sellers can close the day at the reached highs/lows.

Stochastic is a normalized oscillator, displayed in a separate window under the price chart and consisting of two lines: %K is fast and %D is slow. Values vary from 0% to 100%; at the levels of 20% and 80% signal lines are drawn. They single out the oversold (0-20%) and overbought (80-100%) areas. These areas are used for finding signals to buy and sell.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

How to Trade the Engulfing Pattern?

Author: Dmitriy Gurkovskiy

Dear Clients and Partners,​

This overview is devoted to the Engulfing pattern; to how it forms and works. This candlestick pattern is easy to note on the chart. It forecasts a reversal of the actual trend.

How does the Engulfing pattern form?

The Engulfing pattern is a reversal candlestick pattern that forms on the local highs and lows of the price chart in an uptrend or downtrend. It consists of two candlesticks: the first one has a relatively small body, while the second one is of the opposite color and has a larger body that fully covers (engulfs) the first candlestick.

In terms of the market behavior, an Engulfing pattern means that the actual trend is losing its power and tempo — the first candlestick demonstrates this. The previous movement loses strength, and the market balance is feeble.

The appearance of the next mighty candlestick of the pattern that engulfs the previous one and closes in the opposite direction, signifies the beginning of a correction that might even turn into a reversal of the current trend.

Types of the Engulfing pattern

Depending on the color of the second engulfing candlestick, two types of the pattern are sungled out: the Bullish engulfing and the Bearish engulfing.

Bullish engulfing

The pattern forms in a downtrend at the local lows of the price chart. The first small black candlestick of the pattern shows that bears are losing power; then a large white candlestick appears, fully engulfing the body of the first one. This means that bulls are advancing, feeling the bears' weakness.

Next thing, the price goes upwards, and an ascending correction starts. This is confirmed by the quotations rising higher than the high of the large bullish candlestick, the second one.

Bearish engulfing

The pattern forms in an ascending impulse at the local highs of the price chart. The first small white candlestick means that bulls are tired and need a pause. The large black candlestick that follows shows that bears are using their chance, counterattacking.

Then the quotations go down, and a descending correction starts. This is confirmed by falling under the low of the second candlestick, the large and white one.

Closing thoughts

Reversal candlestick patterns called Bullish engulfing and Bearish engulfing form at the local extremes of the price chart in an uptrend or downtrend. They predict a possible correction or even a reversal.

The efficacy of the patterns increase in presence of certain enforcing factors and alongside tech analysis patterns, support/resistance levels, and signals of trading indicators. Before trading for real, practise the patterns on a demo account.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

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Dear traders!

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[Vlad RF]

How to Trade VIX?

Author: Andrey Goilov

Dear Clients and Partners,​

Traders have always been trying to analyze and forecast future price movements. There are plenty of ways of making such forecasts and analyses. Some use chart patterns, some construct complicated trading systems based on indicators. However, there is always an alternative to all these approaches, which is VIX analysis.

This instrument is the index of future volatility of the US stock market. It is also known as "the fear index" because it can demonstrate the market sentiment. When the index values grow, this might mean that the market is expecting serious movements, such as corrections or even global crises. This information, in turn, can be used for making trading decisions.

This article is devoted to VIX and the ways of trading it and its derivatives.

What is VIX?

VIX, or the Volatility Index, was created in 1993 in Chicago Board Options Exchange. Speaking rather particularly, it represents the opinion of traders on the stock market behavior over the next 30 days.

VIX is calculated by the Black-Scholes formula based on 8 stocks from the S&P 500. VIX values can give an idea of how volatile next market movements will be, and this information, in turn, might help investors make a good trading decision.

Some say that market volatility will grow alone guide the growth of the index values. And if the index values are low, the market will remain stable, while any expectations of volatility surges or some malfunctions in the global economy will be useless.

For example, in March 2020, the index values rose extremely high, reaching the level of 2008 when the world got immersed in a tremendous economic crisis. Indeed, the beginning of 2020 was rather unstable, and investors were pretty scared, which resulted in a serious slump of stocks.

Now it is clear that while the market is falling deeper and deeper, panic and uncertainty among investors only grows, and VIX values rise. With VIX, you can try catching the beginning of panic as well as its potential end and start buying cheaper shares without any hurry.

How to trade VIX?

Most often, the fear index is invested in via ETFs or ETNs. Let us focus on some of the instruments.

ProShares VIX Short-Term Futures ETF (VIXY)

This is a rather popular instrument among other ETFs. It represents the volatility dynamics of VIX based on the S&P 500 VIX Short-Term Futures Index, which, in turn, consists of a set of short-term VIX futures.

However, I would recommend VIXY to experienced investors only. As a rule, when the investor understands well what they need, they either try to make a profit on the growth of the S&P 500 volatility or hedges from a significant market slump.

iPath B S&P 500 VIX Short-Term Futures ETN (VXX)

This one is a popular instrument among ETNs. It offers an access to a daily moving long position in VIX futures of the first and second month. VXX represents expectations of investors about the future direction of VIX at the moment when its futures expire.

The asset is volatile, and its movements can reach 10% a day, but high risks mean high potential profit that might be interesting for aggressive traders. Note that VIX movements may have no correlation with VXX, there is a certain lag.

Traders also note that VXX does not suit long positions but it still has negative correlation with the S&P 500. Hence, in large corrections, traders can make money on the growth of volatility with iPath B S&P 500 VIX Short-Term Futures ETN (VXX).

Closing thoughts

In essence, VIX represents the volatility of the US stock market. If its values rise high, investors are afraid of an approaching market correction. And if VIX values are low, this means investors are confident about future market growth.

Note that investments in VIX are thought to be risky, recommended to short-term and aggressive investors only. The "buy and hold" principle is useless here, you will have to keep tracking trades and market behavior on the whole to avoid serious losses.

The best time to invest in volatility is a financial crisis because market players will freak out and sell their assets, which will provoke the growth of volatility and a surge in VIX.

Do not forget about derivatives, such as ETFs and ETNs: they are available and east to sell and buy as any stocks in the marke.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team