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[Vlad RF]

How to Use Correlation Calculator for Currency Pairs

Author: Victor Gryazin

Dear Clients and Partners,​

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

What is currency pair correlation

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

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

Positive correlation

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

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

How to calculate correlation indices

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

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

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

The meaning of the values is as follows:

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

Risks of using correlation in Forex

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

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

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

How to Use Correlation Calculator for Currency Pairs

Author: Victor Gryazin

Dear Clients and Partners,​

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

What is currency pair correlation

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

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

Positive correlation

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

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

How to calculate correlation indices

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

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

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

The meaning of the values is as follows:

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

Risks of using correlation in Forex

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

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

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

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

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

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

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

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Calculate ROA: Formula and Examples

Author: Maks Artemov

Dear Clients and Partners,​

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

What is ROA multiplier

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

Calculation formula of ROA

ROA = Net Profit / Average Assets

Where:

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

Average Assets calculation formula:

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

Where:

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

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

Peculiarities of ROA

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

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

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

Closing thoughts

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

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

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

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

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

We wish good luck to all of you!

Sincerely,
RoboForex Contest

 

[Vlad RF]

What It is Important to Know about NFT in 2022

Author: Andrey Goilov

Dear Clients and Partners,​

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

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

What is NFT crypto token

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

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

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

How NFT differs from crypto

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

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

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

Types of NFT

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

Real estate

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

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

Virtual real estate

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

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

What perspectives NFT market has

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

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

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[RoboForex Contest]

Dear traders!

This week, the ContestFX project traditionally continues with the following competitions:

The 133rd competition of "Demo Forex" started last week.
The 356th competition of "Week with CFD" has started today.
490th competition of "Trade Day" will start on 13.04.2022 at 12:00.
404th competition of "KingSize MT5" will start on 14.04.2022 at 20:00.

We remind you that every winner of our demo competitions receives funds to their real trading account as a reward, so they could use them to earn on the Forex market without investing their financial savings.

If you want to be one of them, join us!

Sincerely,
RoboForex Contest

 

[Vlad RF]

How to Trade Three White Soldiers Pattern

Author: Victor Gryazin

Dear Clients and Partners,​

This article deals with a candlestick pattern called Three White Soldiers: what it looks like, what signals it gives, how it forms, what types it has, and, of course, how it can be used in trading.

How Three White Soldiers pattern forms

Three White Soldiers is a reversal bullish candlestick pattern that predicts a change of a downtrend to an uptrend. This pattern can be encountered on price charts rather often.

When the Three White Soldiers pattern appears, it gives a signal to buy. The pattern has a bearish counterpart called Three Black Crows that was previously described in our blog.

The Three White Soldiers pattern consists of three white candlesticks with large bodies and almost no shadows. The pattern shows that the bulls have managed to capture the initiative and close trading sessions near the daily highs for three days in a row.

Conditions for Three White Soldiers to form

• As long as this is a reversal pattern, it forms on the local lows after a descending movement. This can either be a reversal of a downtrend or the end of a correction in an uptrend.
• Three white candlesticks go one after another and have large bodies.
• Each next candlestick opens at the closing level of the previous one or a bit lower.
• The shadows of the candlesticks are short. Sometimes candlesticks in Three White Soldiers have no shadows at all: such candlesticks are called Marubozu and make the whole pattern stronger.
• The second and third candlesticks must be roughly of the same size. If the third candlestick is obviously smaller than the other two, this means bulls are weak.

Types of Three White Soldiers

There are two more candlestick patterns that also consist of three white candlesticks and resemble Three White Soldiers. These are the Advance Block pattern and the Stalled pattern; however, instead of giving a signal to buy, they warn the trader of the ascending momentum coming to an end.

Advance Block

If the second and third candlesticks of the Three White Soldiers have small bodies and long upper shadows, the pattern is called Advanced Block. As the name of the pattern shows us, the advance of the bulls was blocked and the bears fight back.

The ascending impulse meets serious resistance, and it becomes extremely possible that the quotations will reverse downwards. This pattern is not good for buying because bulls turn out weak. If the trader has open buying positions, they should take the profit in them.

Closing thoughts

The reversal candlestick Three White Soldiers pattern forms after a downward movement and predicts an upward reversal of the quotes. It can be traded on its own or alongside tech analysis instruments and indicators.

Before using the pattern for real, test it on a demo account. See more about candlestick patterns in our Blog.

Read more at R Blog - RoboForex

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex: upcoming changes to the trading schedule in view of the Easter holidays

Dear Clients and Partners,​

We are informing you that due to the Easter holidays in the US and Europe, there will be some changes to the trading schedule on Catholic Good Friday and Easter Monday.

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

MetaTrader 4 / MetaTrader 5 platforms

Schedule for trading on Currency pairs

• 15 April 2022 - trading stops at 7:40 PM server time
• 18 April 2022 - trading as usual

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

• 15 April 2022 - no trading
• 18 April 2022 - trading as usual

Schedule for trading on CFD on the German index DE40Cash

• 15 April 2022 - no trading
• 18 April 2022 - no trading
• 19 April 2022 - trading as usual

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

• 15 April 2022 - no trading
• 18 April 2022 - trading as usual

Schedule for trading on CFDs on US stocks

• 15 April 2022 - no trading
• 18 April 2022 - trading as usual

R StocksTrader platform

Schedule for trading on Currency pairs

• 15 April 2022 - trading stops at 7:40 PM server time
• 18 April 2022 - trading as usual

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

• 15 April 2022 - no trading
• 18 April 2022 - trading as usual

Schedule for trading on CFDs on US indices (US500, US30, NAS100)

• 15 April 2022 - no trading
• 18 April 2022 - trading as usual

Schedule for trading on CFDs on EU and UK indices (GER30, UK100, FRA40, SPA35), Australian index AUS200 and Japanese index J225

• 15 April 2022 - no trading
• 18 April 2022 - no trading
• 19 April 2022 - trading as usual

Schedule for trading on CFDs on EU and UK stocks (except Danish, Norwegian, and Swedish stocks)

• 15 April 2022 - no trading
• 18 April 2022 - no trading
• 19 April 2022 - trading as usual

Schedule for trading on CFDs on Danish, Norwegian and Swedish stocks

• 13 April 2022 - no trading
• 14 April 2022 - no trading
• 15 April 2022 - no trading
• 18 April 2022 - no trading
• 19 April 2022 - trading as usual

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

• 15 April 2022 - no trading
• 18 April 2022 - trading as usual

cTrader platform

Schedule for trading on Currency pairs

• 15 April 2022 - trading stops at 7:40 PM server time
• 18 April 2022 - trading as usual

Schedule for trading on Metals (XAUUSD, XAGUSD)

• 15 April 2022 - no trading
• 18 April 2022 - trading as usual

Please take note of the above trading schedule changes when planning your trading activity.

Sincerely,
RoboForex team

 

[Vlad RF]

RoboForex adds 7 new cryptocurrencies

Dear Clients and Partners,​

RoboForex now offers 7 new cryptocurrencies to invest in: ALGOUSD, AVAXUSD, BNBUSD, LUNAUSD, MANAUSD, MATICUSD and UNIUSD. All these pairs are already available on the MetaTrader 4, MetaTrader 5, and R StocksTrader platforms.

Investing in Cryptocurrencies with RoboForex means:

• 24/7 access to more than 30 crypto instruments
  BTC, ETH, BNB, LTC, BCH, LUNA, XRP, and others.
  
• A single account for all investments
  You won’t need another wallet or account at a crypto exchange.
  
• Conditions at the level of crypto exchanges
  The commission for cryptocurrencies on Prime accounts is 0.1%.

Cryptocurrencies are a promising investment trend, which is chosen by a lot of clients at RoboForex. Therefore, we plan to continue adding new crypto instruments to our existing list and enhancing investment conditions.

Sincerely,
RoboForex team