Tag: Forex

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Forex Basic Strategies

Learning To Trade The 123 Pattern Reversal Trading Strategy

Introduction

Introduction

Introduction

Strategies that we discussed in the previous set of articles were based on indicators and price action patterns. We are going into the trading strategies, where we will combine popular candlestick patterns and price action. The next two articles will discuss the 123 patterns as a reversal trading strategy and continuation trading strategy. First, we will look at the 123 pattern as an indicator of the end of a trend and also a market reversal. Hence, it is also known as the 123 top and bottom pattern.

The 123 top and bottom is a very powerful pattern that signals a reversal of a trend. It is also used as a trend continuation pattern, which we will be discussing in detail shortly. First, let us discuss the 123 patterns as a reversal trading strategy.

Time Frame

A fascinating feature of this strategy is that it applies to all time frames starting from 15 minutes to ‘daily.’ Before trying this strategy on extremely small time frames such as the 5 minutes or 1 minute, a lot of experience is required.

Indicators

As mentioned earlier, in this strategy, we will not be using any technical indicators. The only prerequisite of the strategy is to have a clear understanding of the 123 patterns before reading about the strategy.

Currency Pairs

The strategy is suitable for trading in all currency pairs. However, it is suggested to look for the trading opportunities in major and few minor currency pairs only as the patterns are more reliable and evident in these pairs.

Strategy Concept

The strategy begins by identifying three main points. For example, in an uptrend, when the market hits a new high, label that point as 1. We then wait for the price to pull back to a short-term support area. This point is labeled as 2. Finally, when the price moves up to an area between points 2 and 3, we label this as point number 3. We then take an entry at a suitable location, which we will address in the later part of the strategy.

The pattern is complete when the price stays below point 2. The strategy is to sell the currency pair on the break of point 2. The take-profit of the strategy is placed at a point that results in a 1:2 risk-to-reward ratio. The stop loss is put just above point 3, whereas a more conservative stop loss is placed just above the move, in order to maximize the risk to reward. The trader will be able to make this choice by trading the pattern again and again. Let us understand the step by step process of the strategy.

Trade Setup

In order to illustrate the strategy, we have considered the GBP/AUD currency pair, where we will look for ‘short’ trades by identifying the 123 top patterns. In this example, we are applying our strategy on the 15 minutes time frame and during one of the major trading sessions.

Step 1

The first step of the strategy is to look for point 1, which is essentially the highest point of a trend. The criteria for selection of point 1 is that the market should reach it’s previous low or high twice before it starts moving lower or higher.

In our example, we can see that the previous lows have been tested multiple times, and thus we have chosen the highest point as our point number 1.

Step 2

The next step is to mark the point number 2. When the market pulls back to the recent support or resistance area after reacting from point 1, we mark this as point 2. Remember that the price should not only reach that area but also react and move higher (for uptrend) or lower (for downtrend). This confirms the key technical level.

Step 3

The formation of the 123 pattern is complete after identifying the third point. When the market moves in the area between points 1 and 2 and later comes goes back to point 1, the point from where the market reversed becomes our point 3. Now the next step of the strategy is discovering the ‘entry.’

Step 4

In this step, we will be discussing the ‘entry.’ There are two ways of entering the market in this strategy. The first one is an aggressive way to take an entry on a break of point 2, and as the market starts moving in that direction. Traders who are confident about the pattern and have belief in the market can opt for such an ‘entry.’ The second one is a conservative approach where one takes an ‘entry’ at the test of the previous support or resistance. This gives additional confirmation that the market is ready to go in a favorable direction.

In this case, we have entered the market right after point 2 is broken, which is a little aggressive.

Step 5

Finally, we need to determine our stop-loss and take-profit levels for the strategy. The stop loss is placed a little higher than point 3, or if one wants to maximize their risk to reward ratio, he/she can place it at a 50% mark between point 2 and point 3. The take-profit is placed at a point where the resultant risk to reward is at least 1:2. However, if there is a hurdle in between, profits can also be taken at such points.

Strategy Roundup

The 123 pattern is a major trend reversal pattern is one of the best strategies for trend reversals. One can trade using this strategy on any time frame. The strategy is based on the idea that the market is losing momentum in the direction of the major trend and could reverse any moment. The probability of this strategy is high and does not require knowledge of technical indicators.

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Forex Assets

XPT/USD – How Expensive Is It To Trade This Commodity Asset Class?

Introduction

Introduction

Introduction

Platinum is one of the rarest precious metal found in the Earth’s crust. Only a few hundred tons are produced annually. The name Platinum is derived from a Spanish word platina (little silver).

Similar to how other precious metals like Gold and Silver are traded in the exchange market, Platinum is also actively traded in the market. Its ISO code is XPT and is highly traded against the US Dollar with the ticker XPT/USD.

Understanding XPT/USD

Platinum is a precious metal that is measured in troy ounces (Oz). The market price of XPT/USD represents the value of the US Dollar for one troy oz of Platinum. It is quoted as 1 XPT per X USD. For instance, if the current market price of XPT/USD is 814.50, then it means that each oz of Pl is worth 814.50 USD.

XPT/USD Specification

Spread

It is the difference between the bid and the ask prices. The typical spread in Platinum is usually around 700 pips.

Fee

Unlike currency pairs, Platinum is traded as a Contract for difference (CFD). There are three different types of the fee charged for such trades:

  • Commission charge
  • Overnight fee

Thus, the total fee will be,

Total fee = Spread + commission + overnight

For our example, we shall ignore the overnight fee as it completely depends on how long aa trader is willing to hold his positions. So, the revised fee will be,

Total fee = Spread + commission = 700 + 200 = 900 pips

Trading Range in XPT/USD

The trading range is a representation of volatility in the pair for different time frames in a tabular format. It gives the minimum, average, and maximum volatility in the pair for various time frames.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

XPT/USD Cost as a Percent of the Trading Range

Cost as a % of the trading range illustrates the variation in the cost of trade by considering the time frame and volatility of the instrument. Mathematically, it is the ratio of the volatility value and the total cost represented in terms of a percentage.

Total fee = Spread + commission = 700 + 200 = 900 pips

Trading the XPT/USD

Platinum is one of the highly traded commodities in the exchange market. But its trading volume is lesser than Gold Spot and Silver Spot. Nonetheless, it has enough volatility and liquidity for retail traders to participate in the market.

Platinum is primarily driven by supply and demand that comes from fundamental factors. These factors are different from that of Gold and Silver, yet some do apply on Pl. When it comes to technical analysis, all the techniques apply that is used in other markets.

As mentioned, Platinum is traded as CFD, and each trade has a commission, overnight, and spread involved in it. This fee is fixed irrespective of the volatility of the market and the time frame traded. But there is a catch here. Even though the fee is fixed, the fee varies relatively. Meaning, a trader aiming high profit must pay the same fee as a trader aiming for small profits. The former is typically a large time frame trader, while the latter is a trader trading relatively smaller time frame.

Since the timeframe is something that cannot be fixed, one can relatively reduce costs by considering the volatility of the market. As the above table evidently depicts, as the volatility increases, the relative fee on the trade decreases. Thus, one must consider trading when the volatility of the pair is at or above the average volatility.

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Forex Brokers

MM Financial Experts Review

MM Financial Experts is an FX and CFD broker that is also a binary options provider. The company is owned by Elit Property Vision LTD, a Bulgaria-based company that also owns other brokerages, including GrahamFE and WellingtonInv. These providers don’t loudly advertise their affiliation with the company, which is never a good sign. Taking a look at this specific brokerage’s offers on its own, we see a diverse range of asset classes that can be traded from 8 different live accounts. With so many options to choose from, opening an account can quickly become a tricky process. We’ve gathered all the information we could to bring our readers a comprehensive review that can help with the decision of which account to open, or answer the question of whether this broker is a suitable candidate.

Account Types

MM Financial offers a diverse range of accounts, including Test and Micro accounts, along with Standard, Silver, Platinum, Sapphire, Trader, and Business accounts. As one reaches higher account tiers, then extra benefits will be unlocked. Some of those advantages include expedited withdrawals, spread discounts, earned interest on profits, and risk-free trades. This is a common tactic used by brokerages that push for traders to make larger deposits. Traders will find that this broker’s website can be vague where it counts, especially when describing trading conditions and prices. We were able to determine that spreads start at 4 pips with discounts given once one reaches the Silver account or higher, but we couldn’t find any mention of commission charges at all. Traders will notice that those spreads are much higher than average, and potential commission charges could quickly raise the trading cost to an alarming rate. A quick overview of each account has been provided below.

Test Account
Minimum Deposit: $1,000 USD
Leverage: Up to 1:200
Spread: From 4 pips
Commission: NA

Micro Account
Minimum Deposit: $5,000 USD
Leverage: Up to 1:200
Spread: From 4 pips
Commission: NA

Standard Account
Minimum Deposit: $10,000 USD
Leverage: Up to 1:200
Spread: From 4 pips
Commission: NA

Silver Account
Minimum Deposit: $25,000 USD
Leverage: Up to 1:200
Spread: From 3.6 pips
Commission: NA

Platinum Account
Minimum Deposit: $50,000 USD
Leverage: Up to 1:300
Spread: From 3.4 pips
Commission: NA

Sapphire Account
Minimum Deposit: $75,000 USD
Leverage: Up to 1:400
Spread: From 3.2 pips
Commission: NA

Trader Account
Minimum Deposit: $100,000 USD
Leverage: Up to 1:500
Spread: From 2 pips
Commission: NA

Business Account
Minimum Deposit: $750,000 USD
Leverage: Up to 1:500
Spread: From 1.2 pips
Commission: NA

Platform

The broker offers a simple web-based platform named “Trading Platform” in place of a more popular option like MetaTrader 4 or 5. Beginners may find the registration process to be simpler through this option since one only has to go to the “Trade” tab on the website to register and access the platform. However, more seasoned traders will likely suffer at the hands of the bland platform that doesn’t quite stand alongside MT4 in terms of accessibility, functions, and overall attractiveness. It’s disappointing that MM Financial isn’t willing to pay the licensing fees for a better platform, considering that they are a more expensive brokerage that is owned by an even larger company.

Leverage

The broker offers a leverage of up to 1:200 on their first four account types, pushes the cap to 1:300 on the Platinum account, and up to 1:400 on the Sapphire account. The maximum leverage ratio tops out at a flexible 1:500 maximum on the Trader and Business accounts, providing another advantage to the top-tier account holders. In a similar fashion, certain leverages are assigned to each account when trading cryptocurrencies. Take a look at those options below:

  • Test Account: 1:10
  • Micro Account: 1:10
  • Standard Account: 1:15
  • Silver Account: 1:20
  • Platinum Account: 1:30
  • Sapphire Account: 1:50
  • Trader Account: 1:70
  • Business Account: 1:100

Traders will notice that some of the crypto leverages are much higher than those offered by the competitors. However, one should always remember the risks associated with using high leverage. We wouldn’t recommend using higher options like those featured here without gaining a great deal of experience. Fortunately, traders can start at a lower level and work their way up.

Trade Sizes

When it comes to trading conditions, the broker’s website is very vague. This isn’t the only category where we felt that the website could have done a better job providing us with information. Common sense tells us that the smallest trade sizes would be one micro lot on the Micro account and this is likely the starting option on the Test account as well. However, we can’t say whether the Standard account adopts the same minimum trade size, or raises the requirement. Often times separate account types do come with different trade sizes, with around one lot being required on more expensive accounts.

Trading Costs

This broker is one of many that don’t advertise their costs in a transparent way. The website spends a lot of time boasting about their account’s special offers and spread discounts, which is actually just a fancy way of advertising spreads that are more than double the average amount on most of their accounts. We would hope that this is a sign that commissions aren’t charged, considering that those charges would put the cost of trading at an insane amount. However, we’re left with more questions than answers when it comes to the overall charges applied by the broker, including withdrawal fees. This is another red flag that MM Financial may not be a straightforward option.

Assets

Although MM Financial doesn’t provide a comprehensive list of their available instruments, they do advertise currency pairs, indices, commodities, and stocks as being among their offers. The broker also offers currency pairs, which aren’t offered nearly as common among their competitors. In total, MM Financial claims to offer more than 800 liquid assets for trading, but traders shouldn’t be surprised if this statement doesn’t hold up entirely.

Spreads

When it comes to spreads, the broker’s website doesn’t throw out any exact numbers and instead lists the discount one will receive based on account type. This makes it sound like a great deal when it isn’t. After checking the platform, we found spreads to be around 4 pips. Following that math, we were able to determine the average spreads one would likely see on each account type once discounts have been applied. Those figures can be viewed below.

  • Test Account: 4 pips
  • Micro Account: 4 pips
  • Standard Account: 4 pips
  • Silver Account: 3.6 pips
  • Platinum Account: 3.4 pips
  • Sapphire Account: 3.2 pips
  • Trader Account: 2 pips
  • Business Account: 1.2 pips

Do keep in mind that spreads may deviate from the above numbers since the website isn’t clear about the figures. Judging by what we found, it seems that MM Financial expects one to make a $750K deposit to access less than average spreads. Otherwise, traders will be subject to spreads that are up to more than twice the industry average amount. At those rates, it would be difficult to turn a profit.

Minimum Deposit

MM Financial starts off with an expensive $1,000 entry-level deposit on their Test account, which is much higher than the $100 (or less) entry-level deposits offered by many other brokers. From there, the asking amounts keep climbing, up to $5,000 on the Micro account, $10,000 on the Standard account, $25,000 on the Silver account, $50,000 on the Platinum account, $70,000 on the Sapphire account, $100,000 on the Trader account, and $750,000 on the Business account. Traders should also note that each account holds a maximum balance that tops out at $1 below the funding amount for the next account. For example, the Test out tops out at $4,999, which is just $1 below the Micro account’s $5,000 deposit requirement. Costs with this broker aren’t exactly beginner-friendly and it may take some time to save up to open a simple Test account.

Deposit Methods & Costs

Accounts can seemingly be funded through Visa, MasterCard, bank wire transfer, WebMoney, and Yandex. The website is rather vague when it comes down to describing specific funding information, so we can’t say for sure whether deposits are fee-free or not. If you’re making a deposit through bank wire, then you should expect to see a charge from the bank’s side.

Withdrawal Methods & Costs

MM Financial follows standard guidelines that state withdrawals must be made back to the originating payment method in order to prevent money laundering. Any profits would be withdrawn through bank wire transfer. Note that there is a $50 withdrawal minimum, which could cause a headache later on, especially if one’s luck goes south and they decide to pull out remaining funds. Traders can request a withdrawal online, by phone, email, or in person. Once again, fees aren’t listed on the website, so the broker leaves their clients blindly hoping that charges won’t climb too high.

Withdrawal Processing & Wait Time

The actual timeframe that it can take for the company to process your withdrawal will depend on your chosen account type. Those that can afford one of the better accounts will benefit from this procedure, with 48-hour withdrawals on the Silver & Platinum accounts and 24-hour withdrawals on the Trader & Business accounts. Everyone else will have to wait 1-5 business days for their withdrawals to even be processed. Many other brokers offer 24 to 48-hour processing, regardless of one’s account status, so the wait time is rather extended here.

Bonuses & Promotions

MM Financial offers a Welcome bonus of up to 100% and other trading bonuses, along with a certain number of risk-free trades on each account, plus earned interest on profits for certain accounts. Note that some of these offers are reserved for accounts of the Silver status and up. Take a look at each account’s special offers below:

  • Silver Account: 3 risk-free trades
  • Platinum Account: Extra 3% interest on profits & 5 risk-free trades
  • Sapphire Account: Extra 4% interest on profits & 7 risk-free trades
  • Trader Account: Extra 5% interest on profits & 12 risk-free trades
  • Business Account: Extra 7% interest on profits & 25 risk-free trades

Some additional offers include a certain number of guided trades or daily guided trades (depending on account type) and special earnings reports.

Educational & Trading Tools

Traders won’t find a wide variety of resources available on the broker’s website, instead, MM Financial focuses on providing some articles about forex basics, analysis, trading plans, and market volatility. While those articles can be helpful, beginners will likely benefit from searching elsewhere on the web for more in-depth information and better learning tools, like video tutorials, e-books, and other sources. MM Financial seems to provide services for more experienced traders that can make larger deposits, which is likely the reason why they haven’t invested much of an effort in this category.

Demo Account

Unfortunately, the broker does not seem to see the benefits associated with offering risk-free demo accounts to their clients. Most brokers offer these accounts at the bare minimum, so it’s always a bit surprising when demo accounts aren’t featured alongside other educational resources. The absence of these accounts might seem minor to some, but beginners might suffer without the chance to trade in a simulated environment before opening a live account.

Customer Service

MM Financial doesn’t exactly make it easy to reach out to support – the website doesn’t offer any instant option like LiveChat and it also fails to list a contacts page. In fact, we couldn’t even find a listed email address on the site, so traders will have to reach out to an agent through a form that is provided at the bottom of the website. 24/5 support is advertised, but we wouldn’t expect to see quick responses with all things considered.

Countries Accepted

If you check out the broker’s registration page, you’ll find that the United States is missing from the sign-up list entirely. This isn’t surprising, considering that the country is governed by strict regulation laws. The good news is that Japan, North Korea, and other commonly blacklisted countries can be selected.

Conclusion

Like many others that follow a similar account system, MM Financial places more of an importance on those that can afford to deposit a significant amount of money. It’s understandable for those clients to receive some benefits, but lower status accounts suffer in some ways, such as being pushed to the back of the line for withdrawal processing, not having access to any promotional offers, and etc. Sure, there are some benefits, like high leverage options and a diverse range of assets to choose from, but is this enough when such options are readily available elsewhere? The broker’s website is vague about funding and doesn’t offer much in the ways of education.

Contacting support could be a nightmare, considering that the broker doesn’t even offer a phone line or instant chat option. In a nutshell, MM Financial is an expensive broker that has the audacity to offer spreads from 4 pips on an account for deposits of up to $24,000, while offering common benefits on a vague and unhelpful website. This brokerage is better suited for experienced traders that can afford a better account type, and even then, those traders could likely do better elsewhere.

Categories
Forex Daily Topic Forex Price Action

Double Top or Double Bottom Often Offers More

In today’s lesson, we are going to demonstrate an example of a chart offering multiple entries upon producing the double bottom. We know the double bottom is one of the strongest bullish reversal patterns. When a chart produces a double bottom, price action traders keep their eyes on the chart to keep going long. Usually, a double top or a double bottom ends up offering multiple entries. Let us now have a look at today’s example of how it offers us multiple entries.

In today’s lesson, we are going to demonstrate an example of a chart offering multiple entries upon producing the double bottom. We know the double bottom is one of the strongest bullish reversal patterns. When a chart produces a double bottom, price action traders keep their eyes on the chart to keep going long. Usually, a double top or a double bottom ends up offering multiple entries. Let us now have a look at today’s example of how it offers us multiple entries.

In today’s lesson, we are going to demonstrate an example of a chart offering multiple entries upon producing the double bottom. We know the double bottom is one of the strongest bullish reversal patterns. When a chart produces a double bottom, price action traders keep their eyes on the chart to keep going long. Usually, a double top or a double bottom ends up offering multiple entries. Let us now have a look at today’s example of how it offers us multiple entries.

This is an H4 chart. The chart shows that the price heads towards the South with good bearish momentum. It makes a long bearish move too. However, look at the last candle in the chart. It comes out as a bullish inside bar, which is produced at double bottom support. The buyers are to wait for a breakout at the neckline and go long in the pair.

The chart shows that one of the candles breaches through the neckline level. The next candle comes out as a bullish candle. The buyers are to wait for the price to consolidate and produce a bullish reversal candle to go long in the pair.

Upon producing a bearish inside bar, the price produces a bearish candle. The last candle looks very bearish. However, the buyers must keep their eyes on the chart since it may produce a bullish reversal candle anytime as far as double bottom and neckline breakout are concerned.

The chart produces a bullish reversal candle followed by another bullish candle breaching through consolidation resistance. The buyers may trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R.

The price heads towards the North with good bullish momentum. It hits 1R within the next candle. The price consolidates and produces a bullish reversal candle closing above the last swing high. Do you notice anything here? Yes, this is another entry. The buyers may trigger a long entry right after the last candle closes. Let us have a look at the trade setup with two horizontal lines on the chart.

The price heads towards the North again and hits 1R within the next candle. It seems that the buyers are having a feast here. The way it has been going, they may wait for the price to consolidate again and produce another bullish reversal candle to offer them one more entry. In a word, this is a chart that is going to be closely monitored by the buyers until it produces a strong bearish reversal pattern such as a double top or a bearish engulfing candle on the daily chart (this is an H4 chart). Next time when you see a double top or bottom on a chart, keep eyeing on the chart to make full use of that.

 

Categories
Forex Elliott Wave Forex Market Analysis

DAX Remains Bullish

The German index DAX 30 advances in an upward Elliott wave sequence that suggests more upsides in the following trading sessions.

The German index DAX 30 advances in an upward Elliott wave sequence that suggests more upsides in the following trading sessions.

The German index DAX 30 advances in an upward Elliott wave sequence that suggests more upsides in the following trading sessions.

DAX, in its mid-term Elliott wave outlook illustrated in the 4-hour chart, reveals the recovery that the German index develops in an incomplete zigzag pattern, which corresponds to wave B of Minor degree.

According to the Elliott Wave theory, a zigzag pattern is a corrective formation subdivided into a five-three-five sequence (5-3-5)

Once DAX 30 price had topped at its all-time high of 13,828.8 pts, it began a sharp selloff that ended on the March 19th low at 7,957.6 pts. Then, the German index began to show recovery signals, developing a bullish sequence into five waves of Minuette degree labeled in blue, which ended on April 30th at 11,340.1 pts. This movement led the DAX 30 to complete wave ((a)) of Minute degree labeled in black.

On the other hand, as the price advanced in the first part of the corrective wave, on the RSI oscillator, we observe that the leading indicator surpassed the 60 level and found support at 40, confirming the bullish bias of the corrective structure. At the same time, the progress in the wave ((b)) of Minute degree labeled in black pierced bellow the 40 level, leading us to confirm the end of the three-wave movement.

Once the German index completed its wave ((b)), the market participants kept pushing the price upwards, increasing the bullish momentum of wave (iii) of Minuette degree which jumped up to 12,398 pts on June 08th, reaching its highest level since February 26th. After this high, DAX 30 started to develop its wave (iv) that elapsed until June 29th when the price began to advance in a new upward sequence, which currently looks incomplete.

In the 4-hour chart, we distinguish the DAX30 moving in an incomplete bullish sequence, which could be advancing in its wave iii of Subminuette degree labeled in green. On the other hand, the bullish breakout and consolidation observed in the RSI oscillator over the 60-level lead us to maintain our outlook for further upsides on the German index for the following trading sessions.

The projection made using the Fibonacci extension from the wave ((a)) lead us to foresee a rally continuation that could find resistance at 13,544.3 pts, which coincides with the 100% of Fibonacci extension. In other words, this bullish continuation could complete the 100% of equal waves between waves ((a)) and ((c)). There exists a possibility that the German index continues advancing further to 14,464.3 pts, corresponding to 127.2% of the Fibonacci extension.

In conclusion, our main outlook foresees more upsides for the following trading sessions. Furthermore, the bullish outlook will be valid while the German index remains above 12,085.5 pts, which coincides with the end of wave ii of Subminuette degree identified in green. If this scenario happens, it would be indicative that the wave (iv) is incomplete, and DAX 30 will continue consolidating, as the bullish pressure would decrease over time.

Categories
Forex Basic Strategies

Forex Trading Strategy – Trading The 123 Continuation Pattern

Introduction

Introduction

Introduction

In the previous article, we discussed the 123 patterns as a confirmation sign for the end of a trend. However, while the 123 top and bottom are a great entry method for taking reversal trades, it is observed that most of the time market moves in a trend that requires us to get into the trend in the middle of it. We have heard that ‘the trend is your friend,’ so now we will learn a method to get into a trend using the 123 trend continuation pattern.

The safest trades are the ones that we take in the direction of the major trend. In simple words, if the trend is up, we should be ‘long’ in the market, and if the trend is down, we should be ‘short.’ In fact, it is advised for new traders to always be with the trend and not go for trend reversal trades.

Sometimes, one might miss out on the start of a new trend, for which we need a method to enter the confirmed trend during its progress. In today’s strategy, we will discuss one such method of entering a trending market using the 123 patterns for trend continuation, also called internal 123.

Time Frame

An interesting feature of this strategy is that it can be used on all time frames. One needs to comprehend the strategy very well before trying out this on extremely small time frames, such as 5 minutes or 1 minute.

Indicators

No indicators shall be used in this strategy. However, the Simple Moving Average (SMA) can be used to identify the major market trend.

Currency Pairs

Since the strategy is based on the same 123 reversal pattern that we discussed earlier, the strategy’s parameters will remain the same here as well. Hence, the strategy is suitable for trading in all currency pairs, including major, minor, and few exotic pairs. However, it is advised to trade in the major and minor currency pairs only.

Strategy Concept

The strategy’s basic concept is the continuous identification of 123 points in the direction of the new trend. The initial 123 points are identified in the same way as was identified in the previous section, and subsequently, the same pattern is identified as the trend advances. In this strategy, we will be attempting to catch the trend at the second or third appearance of the pattern. Since we are joining the trend after the move has started and it is in the middle, we cannot expect a large risk to reward ratio. This means the risk to reward of trades using this strategy varies anywhere between 1 to 1.5.

One should be careful while using this strategy for trend trading since most traders end up taking late entries that result in a loss. The strategy cannot be applied when the trend is very much evident on the chart and has reached the end of it. The trader can gauge this through experience and practice. Let us understand the step by step procedure of the strategy with the help of an example.

Trade Setup

In order to explain the strategy, we have considered the GBP/CAD currency pair where will be analyzing the chart on the 4-hour time frame. In this example, we will be looking for ‘short’ trades by identifying a suitable 123 pattern in the currency pair, with the downtrend being our major trend.

Step 1

The first step of this strategy is only a recap of the previous strategy. It involves identifying the reversal of a trend by marking the 3 points and confirming the reversal of the trend. As we can see in the below image, we have marked all the points on the chart and identified the formation of the 123 patterns at the end of an uptrend.

Step 2

This is the crucial step of the strategy, where we only need to repeat the steps that were followed earlier to plot points 1, 2, and 3. The previous lower high or higher low becomes our point 1, the new support or resistance level from where the market reacts becomes 2nd point, and finally, the price that is between new point 2 and 3 from where the market starts moving in the direction of the new trend is the 3rd point.

If we carefully observe, point 3 of the previous step is our new point 1, labeled as 1′ in the below image. The new point 2 is labeled as 2′, and 3′ is our 3rd new point. In the example, we will be entering for a ‘short’ somewhere in the middle of the downtrend and not too late or too early.

Step 3

In this step, we enter the market with appropriate position size and risk evaluation. The entry is the simplest part of the strategy, where we enter the market right at the break of the support or resistance level. This level is nothing but our 2nd point.

Step 4

In this, we determine our take-profit and stop-loss levels for the strategy. As mentioned in the earlier section of the article, the risk to reward ratio will be lower as we are entering the middle of a trend. The stop loss is placed at the 3rd (3′) point, and the take-profit should be at the recent support or demand area that is a hurdle for the down move.

Strategy Roundup

This strategy is only an extension of the previous strategy, where we apply the same rules and steps once again. The difference is that the risk to reward ratio is lower, but we make sure that we are trading with the trend, which puts us in a safer position. Do not apply the strategy again on the same trend.

Categories
Forex Market Analysis

Daily F.X. Analysis, July 06 – Top Trade Setups In Forex – U.S. ISM Non-Manufacturing PMI

On the fundamental side, the market isn’t bustling as we only got ISM Non-Manufacturing PMI from the U.S. and BOC Business Outlook Survey from the Canadian economy. The ISM non-manufacturing may drive some price action during the U.S. session today. Overall, the technical side will play most of the role.

On the fundamental side, the market isn’t bustling as we only got ISM Non-Manufacturing PMI from the U.S. and BOC Business Outlook Survey from the Canadian economy. The ISM non-manufacturing may drive some price action during the U.S. session today. Overall, the technical side will play most of the role.

On the fundamental side, the market isn’t bustling as we only got ISM Non-Manufacturing PMI from the U.S. and BOC Business Outlook Survey from the Canadian economy. The ISM non-manufacturing may drive some price action during the U.S. session today. Overall, the technical side will play most of the role.

Economic Events to Watch Today 

  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.12404 after placing a highof1.12510 and a low of 1.12191. he EUR/USD pair showed a little positive movement on Friday as the U.S. market was closed due to Holiday, and in the absence of American traders, EUR/USD pair followed economic data from Eurozone and COVID-19 news.

On Friday, the economic data from the Eurozone came in positive and above expectations and raised Euro above the U.S. dollar, which pushed EUR/USD pair on the upward track. On the data front, at 11:45 GMT, the French Government Budget Balance for May showed a deficit of 117.9B compared to April’s deficit of 92.1B. At 12:15 GMT, the Spanish Services PMI for June rose to 50.2 from the expected 46.0 and supported Euro. At 12:45 GMT, the Italian Services PMI was decreased to 46.4 from the expected 46.9 and weighed on Euro. 

At 12:50 GMT, the French Final Services PMI for June rose to 50.7 from the 50.3 expected and supported Euro. At 12:55 GMT, the German Final Manufacturing PMI rose to 47.3 in June from the forecasted 45.8 and supported Euro. At 13:00 GMT, the Final Services PMI from the whole bloc for June rose to 48.3 from the expected 47.3 and supported Euro.

The positive PMI data from the whole bloc except Italy gave a boost to single currency Euro at the ending day of the week and raised EUR/USD pair. However, due to a limited number of traders, the currency pair failed to provide a significant bullish move and remained in consolidation.

On the US-EU relation front, earlier this week, the E.U. declined to include the U.S. in its list of “safe-countries” that will be welcomed to enter E.U. bloc during a pandemic. However, given the unshakable alliance between both nations, in a political move, the E.U. would now open the majority of E.U. borders for some residents of the United States. It was not surprising that Americans would indeed enter the E.U. even with almost 3 million COVID-29 cases from 50 U.S. states.

On the negative side, according to European diplomats, the strained alliance of the E.U. and the U.S. would restore in Joe Biden’s presidency. The Presidency of Donald Trump has weighed on the relation of the U.S. with its closest allies, including the European Union. The attacks on International institutions like WHO by Trump have been stressful for its allies. Trump’s disliking for multilateral action has tested longstanding alliances, and European diplomats and foreign policy experts believe that Joe Biden will repair the damage done by Trump to America’s broken alliance with Europe.

This week, the consumer confidence and retail sales figures from Eurozone will be under watch from Euro traders for taking fresh impetus. The attention would also be upon the update of the Recovery fund and announcement of new Eurogroup President.

Daily Support and Resistance

  • R3 1.1339
  • R2 1.1312
  • R1 1.1298

Pivot Point 1.1271

  • S1 1.1256
  • S2 1.123
  • S3 1.1215

EUR/USD– Trading Tip

On Monday, the EUR/USD has violated in a tight range of 1.1243 – 1.1193, which has opened further room for buying until 1.1350. On the lower side, the EUR/USD may find support around 1.1290 and 1.2050. The MACD and RSI are holding in a bullish zone and are supporting the bullish bias in EUR/USD. While the 50 EMA is also supporting bullish bias in the EUR/USD pair, let’s consider taking buying trade in EUR/USD above 1.2565 level today. 

GBP/USD – Daily Analysis

 The GBP/USD closed at 1.24825 after placing a high of 1.24863 and a low of 1.24378. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair moved higher in the risk-on market sentiment after the positive data released from China’s Services sector and continued moving in the same trend to recover some of its previous day’s losses on Friday.

The Caixin Services PMI from China rose to 58.4 in June and indicated growth in the service sector of the second-largest economy of the world. This raised the risk sentiment on the back of increased hopes for sharp V-shaped recovery after China’s positive data. Being a riskier currency pair, the GBP/USD pair moved higher in the market in an improved risk appetite.

On the other hand, the Final Services PMI from Great Britain was released at 13:10 GMT, as 47.1 against the expected 47.0 in June and provided strength to British Pound. The strong GBP pushed GBP/USD further at the ending day of the week.

In the absence of U.S. traders due to bank holiday in the United States, the pair GBP/USD followed the British Pound and Brexit news on Friday.

On Brexit front, Boris Johnson suggested that the prospect of failing to reach a Brexit trade deal before the end of the transition period would be a “very good option” for the U.K.

The remarks from PM Boris Johnson came in after the German Chancellor, Angela Merkel, warned the E.U. to be prepared for the possible failure of Brexit trade talks. She said that the progress in the negotiations and chances to reach a deal were minimal. However, PM Boris Johnson remained positive and optimistic and said that he believed that a good agreement would be reached, but if it failed, then the U.K. will have a very good option of the Australian-style deal.

The European Commissioner for trade, Phil Hogan, has said that the E.U. has not an agreement with Australian, and if the U.K. was seeking an “Australian-style” deal with the bloc, then it was a code for no-deal at all.

Meanwhile, on Saturday, PM Boris Johnson and Kenya’s counterpart, Uhuru Kenyatta, agreed to start negotiations for a post-Brexit trade agreement between the two nations. The talks will be conducted within the Kenya-UK Strategic Partnership Framework established in January and the East African Community parameters.

 Daily Support and Resistance

  • R3 1.2657
  • R2 1.2574
  • R1 1.2524

Pivot Point 1.2441

  • S1 1.239
  • S2 1.2308
  • S3 1.2257

GBP/USD– Trading Tip

The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The USD/JPY closed at 107/475 after placing a high of 107.565 and a low of 107.434. In the absence of U.S. traders due to U.S. Bank Holiday and economic data from Japan, traders remained confused in the market due to the influence of positive data from economies and the increasing number of coronavirus cases.

The USD/JPY remained confined in a closed range and provided a slightly bearish candle at the ending day of the week due to mixed economic market sentiment. The risk sentiment was improved after the release of economic data about the Caixin Services PMI from China, which indicated an expansion in China’s services sector. 

The Caixin Services PMI rose to 58.1 in June, the highest reading in 2 months. It rose the risk appetite in the market, so the USD/JPY pair rose in the earlier trading session. The U.S. jobs figure was also improved on Thursday with 4.8M job creation in June, this also added in the risk appetite. 

However, the USD/JPY pair started moving in the reverse direction due to an increased number of coronavirus cases from across the world. The U.S. recorded more than 52,000 new cases from its 50 states on Thursday, with Florida alone accounting for over 10,000 of them. The U.S. alone was accounted for around a quarter of 10.8M global coronavirus cases. The U.S. Dollar Index that tracks the U.S. dollar value against the basket of six currencies was down 0.1% at 97.203 and dragged the USD/JPY pair on Friday.

On the US-China front, as we already know that the relation between both nations was further deteriorating over a series of issues including trade, COVID-19 pandemic, Taiwan, and Hong Kong, but on Friday, the U.S. deployed two aircraft carriers on the South China Sea which is considered as a significant show of force.

Furthermore, some reports came in that China was forcing birth control and sterilization in Uighurs to destroy the Muslim population. However, China’s foreign ministry spokesman called this news as fake.

In response to this, 75 members of the U.S. Congress sent a letter to Donald Trump urging the President to make a formal determination on whether China’s attitude towards Uighurs Muslims and other groups constituted an atrocity. These tensions raised US-China ongoing conflict and weighed on the market sentiment, which dragged the USD/JPY pair with itself.

Daily Support and Resistance    

  • R3 108.79
  • R2 108.48
  • R1 107.98

Pivot Point 107.67

  • S1 107.17
  • S2 106.86
  • S3 106.36

 

USD/JPY – Trading Tips

On Monday, the USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

Categories
Forex Options

FX Options Market Combined Volume Expiries for 6th July 2020

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

………………………………………………………………………………………………………………

FX option expiries for July 6 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

  • 1.1210 616m
  • 1.1215 554m
  • 1.1345 881m
EURUSD pair currently overbought on the one-hour chart but remains bid after the US holiday. Expect price action to test 1.13 key level and if it finds support here the 1.1345 option will look more likely. Eurozone and US data up later.

………………………………………………………………….

As you can see on the charts, we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled in red, orange and blue.  Therefore, if you see option expiry exchange rates labelled in red these should be considered in-play, because we believe there is a greater chance of the expiry maturing at these levels based on technical analysis at the time of writing. There is still a lesser possibility of a strike if they are in orange and so these are ‘in-play’ too. However, if we have labelled them in blue, they should be considered ‘not in-play’ and therefore price action would be unlikely to reach these levels, which are often referred to as Strikes, at the time of the 10 AM New York cut.

Our technical analysis is based on exchange rates which may be several hours earlier in the day and may not reflect price action at the time of the maturities. Also, we have not factored in economic data releases or keynote speeches by policymakers, or potential market volatility leading up to the cut.

Although we have added some technical analysis, we suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage. Remember the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 AM Eastern time.

If you want to learn how forex option expiries affect price action in the spot FX market see our educational article by clicking here: https://bit.ly/2VR2Nji

DISCLAIMER: Please note that this information is for educational purposes. Also, the maturities will look more or less likely to become a strike at 10 AM NY time due to exchange rate fluctuations resulting in a different perspective with regard to technical analysis, and also due to upcoming economic data releases for the associated pairs.

Categories
Forex Course

139. How Professionals Trade The Different Market States?

Introduction

Introduction

Introduction

In this series of different states of the market, we understood the terminology and the concepts involved. However, in the forex market, if we do not go practical, there is the least use to the concept. In other words, one must understand how to trade in the market, knowing its state. In this final lesson of the series, we shall dive deep into the topic and understand how to apply them in the market.

Trading a Trend

Trading a trending market is the simplest and safest way to trade in the market. This is because, in a trend, it is evident on which party is dominating the market. For example, in an uptrend, it is clear that the buyers are more powerful than sellers. And hence, we look for buying opportunities rather than selling.

In a trend, the market makes higher highs and higher lows. In other words, the market moves in one direction with temporary pullbacks in the opposite direction. These pullbacks (retracements) typically turn around to the original trend direction at the support and resistance levels. So, to trade a trend, we wait for the market to make a higher high / lower low and retrace to the S&R level, before triggering the buy or sell.

Consider the below chart of USD/CAD. The market is in a clear downtrend. The market made a new lower low by breaking below the grey ray. It then retraced back to the S&R area (grey ray) and is currently moving sideways. And this sideways movement in the market has high significance.

After the sellers made a new low, the buyers began to show up. They made it until the S&R level. And the market is currently in a range. As per the definition of a range, we know that there is strength from both the parties. In other words, the buyer who was temporarily dominating the market is slowing down as they are unable to make a higher high. And this price action is happening in the S&R area of the sellers. Therefore, we can conclude that the sellers are here to continue their downtrend.

One can enter when the price is at the top of the range (resistance) or when it starts to fall from the resistance. Placing the stop-loss few pips above the S&R level, and a take profit at the Low, is the safest approach to trade a trend.

Trading a Range

In a range, the market moves between levels – Support and Resistance. In this type of market, there is power from both buyers and sellers. Typically, the market shoots up from the support and drops from the resistance. However, randomly buying at support and selling from resistance is not the right way to trade a range like a professional. To trade a range with high odds in your favor, you must be aware of the overall trend. And you place your bets on the direction of the overall trend.

Consider the below chart of NZD/CAD. We can clearly see that the market is in a range. But, looking from the left, the market is in a strong uptrend, and the price is holding above the S&R level (grey ray). In the current market, we see that the price dropped below the bottom of the range, touched the S&R level, and shot right back up into the range. Thus, confirming that the big buyer is preparing to do the buys.

Since the price strongly reacted off from the S&R level and held above the support of the range, we can prepare to go long on the market. Stop-loss from this trade would be below the S&R level, while the target point would be at the top of the range. In hindsight, the buyers were able to push the market above than the resistance.

This brings us to the end of this series. We hope you found this lesson and the previous chapters interesting and informative. Stay tuned until we release our new set of lessons.

[wp_quiz id=”79656″]
Categories
Forex Fundamental Analysis

Knowing The Significance Of ‘Gross National Product’ Macro Economic Indicator

Introduction

Introduction

Introduction

The two most important metrics of economic growth are the Gross Domestic Product (GDP) and Gross National Product (GNP). Up until 1991 the United States primarily measured its economic growth in terms of the Gross National Product and switched to Gross Domestic Product to make it easy for comparison with other countries, since many other countries were measured through the same.

But in practice, it is always necessary to assess a country’s growth in both the GDP and GNP terms to better understand the overall economic output. Hence, GNP also forms an excellent fundamental indicator of economic growth, almost as important as the GDP.

What is the Gross National Product?

Gross National Product, also called GNP, is the total monetary value of all goods and services produced by the country’s residents and businesses, irrespective of the production location. It means a business earning revenue in a foreign land is included in the domestic country’s GNP. 

Gross National Product defines the economic output based on citizenship, or that country’s native people. Hence, a citizen having an extra income source in any monetary form overseas is factored into the GNP. GNP is higher for countries that have many of their businesses established in a foreign land. Accordingly, any output generated by foreign residents within the country is excluded out from the GNP.

Gross Domestic Product (GDP) v/s Gross National Product (GNP)

It is essential to understand the difference between GDP and GNP during our analysis. GDP and GNP both measure economic output for a given period but differ in how they define the economy’s scope.

Gross Domestic Product is the total value of all goods and services produced by the nation. Here, GDP limits its assessment to the nation’s geographical borders and does not take into account the overseas economic activities of its nationals.

GNP does not restrict itself to the geography of the nation but limits itself in terms of citizenship. GDP does not reflect determinant in nationality. As long as the finished goods and services are within the country’s borders, it is included. On the other hand, GNP will not include any of the domestic borders’ revenue if it is from a foreigner.

The formula for GNP is given as:

GNP = Consumption + Investment + Government + Net Exports + Net Income

In the above equation,

  • Net Exports stands for the difference between the revenue generated from Exports and revenue going out for imports.
  • Net Income stands for the income of domestic residents from overseas or foreign investments minus net income of foreign residents from domestic investments.

The GNP is very indicative of the financial well-being of a country’s nationals and its country-based multinational corporations. From a relative perspective, it does not tell us much about the country’s health, as the GDP does. GNP is a more realistic measure of a country’s Income than its production.

To clarify the role of each metric better, consider the below examples:

Microsoft is the United States-based multinational company. It has a branch in India. The revenue generated from the Microsoft-India branch will be included in the GNP of the United States, but not in India’s GNP. On the other hand, Microsoft-India’s revenue is not included in the GDP of the United States but is included in India’s GDP.

How can the Gross National Product numbers be used for analysis?

It is essential to understand that GNP does not reflect the domestic (geographical basis) conditions well. If a natural disaster were to occur within the United States, then the GNP would not be as affected as the GDP, as the foreign revenue by its residents would not depend on the domestic situations. Hence, GDP is a more accurate measure of economic activity. On the other hand, its citizens’ financial well-being is more accurately measured through GNP than GDP.

GDP is a measure of economic health, while GNP is a measure of a nation’s Real Income. Both are different but related. A country like China, where many companies from other countries have their business has higher GDP than GNP, on the other hand, the United States, which has many of its firms’ production houses outside its land, has higher GNP than its GDP. Significant differences between the GDP and GNP values can be accounted to the openness of the countries to International Trade and Global Markets.

Impact on Currency

The Gross National Product is itself susceptible to the currency and exchange rate. When the currency falls, the Gross National Product increases due to the strengthening of other countries’ currencies where the domestic firms are doing business. The health of the economy is not gauged by the GNP accurately. Currency movements are not as driven by the GNP as they are by the GDP. Hence, it is more critical as a financial indicator than as an economic indicator in our analysis.

It is a lagging and proportional indicator, and hence the impact of the GNP is not as pronounced as the GDP, as all other countries use GDP as their primary measure of economic health. Investors, economists, policymakers, and traders all use GDP primarily over GNP to assess the economy’s current health and direction. Hence, it is a low impact indicator of our fundamental currency analysis.

Economic Reports

For the U.S., the Bureau of Economic Analysis releases quarterly reports of the Gross Domestic Product, which contains the GNP information. The St. Louis FRED consolidates the same data and maintains it on its website.

Sources of Gross National Product

The St. Louis FRED website holds the GNP data that is very easy to access and analyze, and the link is here.

GNP data for various countries can be obtained here

Impact of the “Gross National Product” news release on the Forex market

In the above section of the article, we defined the Gross National Product (GNP) and described the analysis method. We will extend our discussion and understand the impact of the Gross National Product news announcement on the value of a currency. The GNP gives an estimate of the total value of all the final products and services rolled out in a given period utilizing production owned by a country’s residents.

The GNP includes personal consumption expenditures, domestic investment, government expenditure, net exports, and Income from foreign investments. A small distinction between the GNP and GDP is that GDP measures the value of goods and services produced within the country’s borders. In contrast, GNP calculates the value of goods and services produced by the country’s citizens only both domestically and abroad. However, GNP is also one of the most commonly used indicators for measuring the country’s economy.    

In today’s example, we will analyze the impact of the United Kingdom’s GNP on the value of the Great British Pound. The below image shows the GNP in the U.K. during the fourth quarter, which was higher than the third quarter. Let us find out the impact.  

GBP/USD | Before the announcement:

We will begin our discussion with the GBP/USD currency pair to observe the change in volatility after the news announcement. The earlier image shows the state of the chart before the news announcement, where we understand the market is in a strong downtrend, and recently the price seems to be moving upwards. This could be a possible price retracement that could lead to the continuation of the trend and an opportunity. 

GBP/USD | After the announcement:

After the news announcement, the market gets very bullish, and we see a sharp rise in the price. The positive reaction from the market is a result of the upbeat GNP data, which was better than expectations. This brought cheer among the market participants who took the price higher by strengthening the British Pound. We should not take any ‘short’ position until we notice trend continuation patterns in the market.

GBP/CAD| Before the announcement:

GBP/CAD| After the announcement:

The above images represent the GBP/CAD currency pair, where in the first image, we see that the market appears to be moving within a ‘range’ with the price currently at the bottom of the ‘range.’ Before the news announcement, the currency pair is very volatile, suggesting that there is a lot of trading action in this pair. In such high volatile environment, we recommend waiting for the news release and then taking a suitable position in the pair.

After the news announcement, the price suddenly moves higher and volatility expands on the upside. The bullishness in the British Pound is a consequence of the optimistic GNP data, which showed a growth in the economy during the fourth quarter. Since the price is at the bottom of the ‘range,’ one can take ‘long’ in this currency pair with a target until the ‘resistance.’

EUR/GBP | Before the announcement:

EUR/GBP | After the announcement:

The above images are that of the EUR/GBP currency pair, where we see that the market is in a strong uptrend before the news announcement, signifying the enormous amount of strength in the British Pound, since the currency is on the left-hand side of the pair. Depending on the outcome of the news and change in volatility, we will analyze the currency pair accordingly.

After the news announcement, market crashes, so much that the price goes below the moving average. The ‘news candle’ closes, forming a reversal candlestick pattern that could lead to the beginning of a downtrend. The volatility increases to the downside as the GNP data was reasonably good.

We hope you understood what ‘Gross National Product’ is and its impact on the Forex price charts. Cheers!

Categories
Forex Brokers

NetoTrade Review

NetoTrade is a global online exchange broker that has coined the phrase “Real Market Trading”. More than 260K clients have opened accounts through this unregulated brokerage, which has been in business since 2010. Based out of Cyprus, NetoTrade offers high leveraged trading on FX pairs, metals, oil, commodities, and a few cash indices and equities. […]

NetoTrade is a global online exchange broker that has coined the phrase “Real Market Trading”. More than 260K clients have opened accounts through this unregulated brokerage, which has been in business since 2010. Based out of Cyprus, NetoTrade offers high leveraged trading on FX pairs, metals, oil, commodities, and a few cash indices and equities. […]

NetoTrade is a global online exchange broker that has coined the phrase “Real Market Trading”. More than 260K clients have opened accounts through this unregulated brokerage, which has been in business since 2010. Based out of Cyprus, NetoTrade offers high leveraged trading on FX pairs, metals, oil, commodities, and a few cash indices and equities. The website’s primary language is Arabic, but traders will be able to translate through their browser. The broker was founded by a group of economists with more than 50 years of experience in the forex market with a commitment of reliability and transparency. NetoTrade offers four live accounts with varying conditions, so it would be in one’s best interest to take a closer look at those details before opening an account.

Account Types

NetoTrade offers four live account types: Mini, Golden, Platinum, and ECN. The broker markets the Mini account as being the best option for beginners, while the Golden, ECN, and Platinum accounts are designed for more experienced, professional-level traders. It costs at least $500 USD to get started with a simple Mini account and the broker asks for deposits of $5,000 or more on their other three accounts, making the start-up process rather expensive. A significant leverage cap of 1:400 is available for all account holders, even the accounts with higher balances, so this is a plus.

As for spreads, options start at just 0.3 pips on the ECN account, while the remaining accounts offer spreads from a higher 1.8 – 3.3 starting pips. Mini account holders will be the only traders that are excluded from having a personal account manager and the account does not offer access to educational tools according to the website, however, we were still able to access basic resources without opening an account. The Golden account offers a 20% welcome bonus, while the Mini account offers a 25% education bonus. We’ve provided an overview of each account’s details below.

Mini Account
Minimum Deposit: $500 USD
Leverage: Up to 1:400
Spread: From 3.3 pips
Commission: None

Golden Account
Minimum Deposit: $5,000 USD
Leverage: Up to 1:400
Spread: From 2.2 pips
Commission: None

Platinum Account
Minimum Deposit: $50,000 USD
Leverage: Up to 1:400
Spread: From 1.8 pips
Commission: None

ECN Account
Minimum Deposit: From $5,000 USD
Leverage: Up to 1:400
Spread: From 0.3 pips
Commission: From 0.3 points

Platform

NetoTrade offers the most popular MetaTrader 4 trading platform, which is accessible in four convenient options – through the web-browser, desktop, and download on mobile devices, including tablets. In addition, the broker offers its own web-based platform named after themselves and a mobile app named NetREtrade that also belongs to the company. MT4 would definitely be the most recognizable of the options, although it’s nice to see additional options in case traders would prefer to use another platform. We’ve outlined some of the highlights for each platform option below.

MetaTrader 4

  • Highly accessible through desktop, mobile, tablets, web-browser
  • Customizable, user-friendly interface
  • Charting tools, multiple technical indicators, 9 timeframes, etc.
  • Supports one-click trading, EAs, VPS, and more
  • Multiple timeframes and four pending order types

Netotrade Web Platform

  • Allows one to trade from anywhere without downloading the program
  • Fast execution
  • Offers access to all of the broker’s available instruments
  • Supports one-click trading, designed to be easy to use

NetREtrade Platform

  • Available on mobile devices; offers convenient trading on the go
  • Ability to place automatic orders such as stop loss and take profit
  • Prices come directly from central banks, shows trade history

Leverage

The broker offers a significant leverage cap of 1:400 on all four of their account types. This is an especially rare offer for ECN and especially Platinum account holders, considering that those accounts hold a large amount of equity. Of course, traders shouldn’t use the highest leverage available if they aren’t prepared to do so – trading with a high leverage can result in a large loss of funds. Regardless of whether one would prefer to use a higher option, having the choice to do so is a perk, so long as one only does so with the risks in mind.

Trade Sizes

The minimum trade size is one micro lot on the Mini account, 0.05 lot on the Golden and ECN account, and 0.25 lots on the Platinum account. The website doesn’t offer further information about trade sizes, the maximum number of open positions allowed, etc. We also failed to find any listed stop out limit. We did reach out to support for clarity, but we still haven’t heard back from an agent. It isn’t surprising to see that these details aren’t provided, considering that the website can be vague at times.

Trading Costs

Accounts fall into two separate pricing models; traders can pay higher spreads with no commission costs on the Mini, Golden, and Platinum accounts, or traders can trade with spreads from 0.3 pips while paying commission charges from the ECN account. Commissions are listed as starting from 0.3 points on the ECN account. When listing commission charges on stocks, the website breaks the ECN account into Platinum and Gold status levels and offers commissions that are $2 less per lot on the Platinum status. This is somewhat odd, considering that the broker markets the ECN account as being one live account type.

Charges are $15 per standard lot on the Gold status level ECN account and $13 per lot on the Platinum status level ECN account. In addition, traders will pay swap charges on applicable positions that are held past the daily market closing time. Applicable swap charges can be viewed within the MT4 platform and traders should note that triple charges would apply on Wednesdays.

Assets

NetoTrade offers more than 100 instruments, which can be divided into FX pairs, precious metals Gold & Silver, cash indices, oil, and agricultural products. ECN account holders will also have the option to trade in US equities on NASDAQ and NYSE. Agricultural commodities include Corn, Sugar, Coffee, and Wheat. Natural Gas and Brent Oil are also available. The best way to view all of the available instruments is from the “Accounts” page within the spreads chart.

Spreads

One of the main things to consider before selecting an account type with this broker would be the spreads. On the Mini account, spreads are ridiculously high. Starting from 3.3 pips on USDJPY spreads quickly climb to 4.2 pips and higher on every other currency pair. Keep in mind that the industry average is actually around 1.5 pips, so spreads are more than doubled. It isn’t uncommon to see higher spreads for this type of account, but lower-status accounts typically offer spreads of around 2 pips in general. On the Golden account, spreads actually start at 2.2 pips on USDJPY and are from 3.2 pips and up on several other instruments. For the deposits that these accounts are asking, traders would be able to access much better options through another broker.

As for the Platinum account, NetoTrade actually expects a $50,000 deposit to access spreads from an above-average 1.8 pips. Options quickly jump to a range that is 2 pips and higher – as we mentioned, this is actually worse than what’s offered on many broker’s Mini/Micro/Cent accounts. The only account that manages to bring traders a competitive spread would be the ECN account, where spreads start from 0.3 pips, although commission charges are applied. Some options manage to stay below an average range, but spreads on many currency pairs are 3 pips or higher.

Minimum Deposit

The broker asks for a steep $500 USD deposit in order to open their Mini account, which comes with extremely high spreads. Traders would be able to access a Standard account or better elsewhere for a lower deposit. The Golden Account shares a $5,000 requirement with the ECN account. Those that are looking to open a Platinum account will need to deposit $50,000. Regardless of which account you’re looking at; it costs more than average to start trading with this broker. There is also a standard $100 deposit requirement for replenishment deposits. Compare this to the deposit requirements of $5 – $100 offered my many other brokers, and it’s easy to see that NetoTrade falls short of the competition in this category.

Deposit Methods & Costs

NetoTrade offers three payment methods; bank wire transfer, cards, and CashU. The website skips over potential funding charges, although many brokers only charge fees on withdrawals. It takes 3-5 days for funds sent by bank wire transfer to reach the trading account. The current market exchange rate is according to the current market price +0.5%. Traders should be sure to upload POI (proof of identity) and POA (proof of address) documents prior to funding the account in order to avoid funding delays.

Withdrawal Methods & Costs

We would assume that funds are processed back to the original payment method, with profits withdrawn to bank wire if NetoTrade follows traditional money-laundering prevention guidelines. The website doesn’t cover any potential fees, so traders shouldn’t be surprised to see some types of charges. This is especially true for bank wire withdrawals, as fees would likely be charged from the bank’s side. Then again, fee-free withdrawals are possible for some of the payment methods. We’d usually suggest making a small test deposit, in this case, to check for any unanticipated fees, but it is impossible to do so due to the $500 minimum deposit requirement.

Withdrawal Processing & Wait Time

The broker doesn’t mention how long it can take for withdrawals to be processed. Since it takes 3-5 business days for a bank wire to reach the trading account when depositing, we would expect a similar timeframe or slightly longer for withdrawals to be returned back to the trader’s bank account.

Bonuses & Promotions

NetoTrade offers promotions for specific account holders. Golden account holders would receive a 20% welcome bonus, which is applied to initial deposits. The Mini account offers a 25% education bonus. ECN and Platinum account holders cannot currently participate in either promotion. As always, some terms and conditions do apply when it comes to receiving and withdrawing applied bonus funds.

Educational & Trading Tools

The broker’s website features an education section that includes a forex glossary, articles, demo accounts, and a FAQ. When listing each account’s features, NetoTrade mentions the possibility to use educational tools on the Golden, ECN, and Platinum accounts, which means that Mini account holders are excluded. It’s extremely disappointing when traders try to withhold resources from certain account holders, especially considering that Mini account holders are more likely to be beginner-level status and would need the tools more than other traders. Educating clients is in the broker’s best interest, so it makes no sense to not offer those resources to everyone. It also isn’t clear as to whether traders would actually have access to additional resources since there are accessible options on the website.

Demo Account

NetoTrade offers free demo accounts to any trader that would like the advantage of trading from one risk-free. Demo accounts work as simulation live accounts and offer the same trading environment while allowing traders to use virtual currency so as not to risk any real funds. We’re happy to see these accounts available for everyone, especially considering that the broker may withhold other educational resources. The easiest way to open a demo account is to navigate to the education section of the website and to choose the “Open Demo” option.

Customer Service

NetoTrade offers phone and email support. Sadly, traders won’t be able to use any instant contact options such as LiveChat, Skype, WhatsApp, etc. available on the website. LiveChat is actually listed from the sidebar, but the website does not load the option, so it seems unavailable. The website is available in Arabic with the option to translate through one’s browser, but NetoTrade does not offer English versions of the site. This means that there may a communication barrier between support staff and traders that speak other languages. The broker also offers links to their YouTube channel, Facebook page, Twitter account, LinkedIn, and Google+ accounts at the bottom of the website. Contact details have been listed below for phone, fax, and various email addresses that relate to different departments.

Phone
Phone+ 44-2080893679
Fax: +44-2035142167

Email
Support: [email protected]
Finance: [email protected]
Compliance: [email protected]

Countries Accepted

NetoTrade does not seem to place any restrictions based on one’s country of residence. The website doesn’t list any restricted countries, which is usually a good sign that the broker is lenient. The registration page simply asks for one’s name, email, password, and phone number without requiring one to input a country at all. This provides an advantage to traders from the US, Japan, Canada, and other commonly restricted locations.

Conclusion

NetoTrade offers leveraged trading of up to 1:400 on all four of their live account types. Investment options include 100+ instruments, including FX pairs, metals, commodities, oil, cash indices, and some equities. NetoTrade asks traders for deposits of $500 – $50,000 USD in return for spreads that are more than twice the average amount or more on some of their account types. Options start from 0.3 pips on the ECN account, but traders will see starting spreads from 1.8 pips – 3.3 pips on the remaining accounts. Traders have the choice between MetaTrader 4 and the broker’s own web-based and mobile trading platforms. Funding information is slim. The broker only offers three payment methods and does not cover potential charges or processing times for withdrawals. NetoTrade’s minimum deposit requirement also makes it impossible to perform a test deposit.

Support can only be contacted through email or phone, and there aren’t any instant contact methods working currently. Educational resources are minimal and there may be extra options for traders that can afford to open better accounts. The broker also offers a couple of bonuses without outlining terms clearly. NetoTrade seems to be a better option for traders that are looking at an ECN-based account type. Conditions on that account type aren’t bad, and the broker offers a significant leverage option as long as one can afford the deposit. However, it may be best to avoid the Mini, Golden, and Platinum accounts altogether, since those accounts don’t offer competitive conditions that are worthy of their price.

Categories
Forex Service Review

Linthrope Review

Linthrope is a forex investment firm that features FX options with a leverage cap of up to 1:50. The company was founded by a group of retail entrepreneurs and capital market dealers with 15 years’ worth of experience serving the Forex industry. According to their mission statement, the founders claim that they understand their success […]

Linthrope is a forex investment firm that features FX options with a leverage cap of up to 1:50. The company was founded by a group of retail entrepreneurs and capital market dealers with 15 years’ worth of experience serving the Forex industry. According to their mission statement, the founders claim that they understand their success […]

Linthrope is a forex investment firm that features FX options with a leverage cap of up to 1:50. The company was founded by a group of retail entrepreneurs and capital market dealers with 15 years’ worth of experience serving the Forex industry. According to their mission statement, the founders claim that they understand their success goes hand-in-hand with the quality of services that are provided, which inspires transparent account practices and the desire to continuously expand their limited number of available trading instruments. As far as a central location, we did find the broker’s phone number to be within Hong Kong, but the website is missing a few concrete details. Some details about trading conditions are vague, so we scoured the website for our readers to paint the clearest picture possible.

Account Types

Linthrope offers one live account type, which comes with Non-Dealing Desk execution and a personal account manager. Joint and/or accounts are available, meaning that joint accounts where either one of the account holders can sign for approval on ordinary operations can be opened, but joint accounts that require signatures from both parties are not available.

Traders can get started with a $1,000 USD deposit or the equivalent in another base currency. Aside from the supported leverage ratio of up to 1:50, Linthrope doesn’t offer any information about their live account’s pricing, so we can’t comment on the spreads or whether commission fees are charged. Even through research, it is difficult to put a price point on the broker’s live account. This is one of the broker’s biggest downfalls, along with the fact that available instruments are limited to a small number of currency pairs. Below, we’ve provided all of the account details that were available.

Linthrope Live Account
Minimum Deposit: $1,000 USD
Leverage: Up to 1:50
Assets: 20+ currency pairs
Spread: NA
Commission: NA

The broker requires an application to be filled out by traders and it can take an agent 1-3 business days to get back in touch in order to guide one through the process. The next steps would be to submit a photo ID that displays the residential address and then to fund the account with the minimum $1,000 USD deposit requirement.

Platform

Linthrope offers one of the world’s most powerful trading platforms, MetaTrader 4. Since its initial launch in 2005, MT4 has become a staple in the forex trading industry, serving as an all-in-one platform option that can handle even the most aggressive of traders, while offering a simple, user-friendly setup that is beginner-friendly as well. We’ve provided a few of the platform’s highlights below.

  • Available on desktop, web-browser, App Store for iOS, Google Play Store for Android
  • Provides the ability to implement technical analysis with chart functions
  • Features 4 pending order types, 9 timeframes, multiple analysis objects
  • User-friendly, customizable, and supports demo accounts
  • EA friendly
  • Alerts & news on mobile devices

Leverage

Linthrope sets a rather restrictive leverage cap for an unregulated broker, at a default ratio of 1:50. Options cannot be changed by the account holder directly, traders would need to email support to request a lower leverage if desired. The cap would certainly help to stop beginners from making one of the biggest mistakes of using unfavorably high leverage too soon; however, most brokers offer a leverage of at least 1:100, which is the most preferred choice of many professionals. Considering that Linthrope is only dealing in FX pairs, the option seems as though it may not be sufficient enough for those with more experience.

Trade Sizes

Expert Advisors are available on the desktop and web-based versions of MT4, but the option isn’t supported on mobile applications. There are no size limits on MT4 orders and large orders can be executed through partial fills. Further information related to trade sizes and exact stop out levels isn’t detailed on the website.

Trading Costs

Linthrope isn’t exactly transparent about their trading costs, despite the fact that their mission statement mentions transparency. Without being able to compare spreads or to know whether commission fees are charged, traders won’t know what to expect. Despite our best efforts, it wasn’t possible to find any information about these fees on the web, in other reviews, or from customer support. On another note, Linthrope does offer negative balance protection, which would reset the account’s balance to 0 in the event that stop out doesn’t stop the account from going into negative territory. The website also fails to list any extra charges, such as inactivity fees; however, traders shouldn’t be completely certain that extra fees don’t apply, based on how vague the website is in general.

Assets

Linthrope lists more than 20 currency pairs as being available to their live account holders. Without further information, we can assume that the available currency pairs would consist of majors and minors. Exotic options are likely missing, based on the lower number of pairs available. The more limited access to FX options might be less disappointing if the broker offered other types of assets for trading, like CFDs on stocks, commodities, oil, or other instruments. This makes Linthrope better suited for traders that are looking to trade basic forex pairs with no desire to access more diverse investment portfolio. Note that the broker does mention that they desire to expand their asset offers in the future, but traders shouldn’t hold their breath.

Spreads

As we mentioned earlier, the broker’s website fails to provide even a basic idea of the spreads that are associated with opening a live account. Considering the account’s high deposit requirement, we would hope that spreads would be somewhat competitive, however, the fact that options aren’t advertised on the website could also suggest that spreads are less than advantageous. One thing we do know is that traders should expect to see wider spreads than usual under certain times of market volatility, including holidays, the first few hours when the market is open, etc. It may be best to avoid trading during those times in order to trade under better conditions.

Minimum Deposit

Linthrope asks traders for a steep $1,000 USD deposit in order to get started trading from an account. Many other brokers offer accounts for $100 or less, and some have even eliminated deposit requirements altogether. It is also difficult to compare the broker’s live account to other account types and their costs since we don’t get any information about the account’s spreads or other associated costs. It’s concerning that Linthrope expects traders to meet their larger deposit requirements without this information.

Deposit Methods & Costs

Instant deposits are impossible due to Linthrope’s policy to accept deposits through bank wire transfer only. Accepted currencies include USD, SGD, AUD, EUR, and GBP, but clients should note that trading accounts only support USD-based currency and funds in any other currency will be converted. It typically takes 3-5 working days for funds to reach the beneficiary bank. Linthrope credits funds to the trading account as soon as they have been received. Transfers are subject to any local and overseas charges imposed on the bank’s side.

Withdrawal Methods & Costs

Traders need to email [email protected] in order to request a withdrawal request form for bank wire withdrawals. Applicable fees would be charged on the bank’s behalf, with typical fees ranging from around $25 – $50, or more in some cases. Currency conversion fees may apply to funds that are being transferred to a currency other than USD.

Withdrawal Processing & Wait Time

Processing times may be delayed due to the need for clients to request the withdrawal form through email and the need to then send the form back to support through email. Once the form has been received, it can take 3-5 working days for funds to be remitted back to the client’s bank account. Bank wire is typically a slower method once the broker’s processing times are added in with the banks, which is another reason why it would be helpful to add cards or e-wallets to the list of accepted payment methods. Unfortunately, the lack of choices makes the longer processing times unavoidable.

Bonuses & Promotions

Linthrope falls into the category of brokers that don’t offer any type of promotional opportunities. This isn’t exactly surprising, considering that smaller brokers don’t usually go out of their way to provide bonuses, contests, rebates, and other ways to earn extra funds. The broker’s website is rather vague in general and it doesn’t seem as though there are any plans to add offers in the near future.

Educational & Trading Tools

Linthrope sticks to very basic educational sources – traders are able to open demo accounts and access a brief “What is Forex” area of the website, which basically outlines some entry-level information. As for trading tools, a currency conversion calculator is provided on the website under “Account Types” > “Live Account”. The calculator could be helpful for those that are depositing in a currency other than USD since other currencies are converted to USD once a deposit is made. Traders will also find a few other trading tools built-into the MT4 platform; however, the broker’s overall offers are very limited. Traders that are looking to start from scratch may want to look elsewhere on the web for better resources and information.

Demo Account

Linthrope offers free demo accounts with no need for traders to register a live account or deposit any real funds. Demo accounts serve multiple purposes, from obvious options like allowing beginners to trade in a simulated environment, to offering professionals a chance to trade under the broker’s conditions or to test different account types when they are available. Demo accounts do expire after 30 days of inactivity, but it is possible to open a new account at any time by following the steps below.

  1. Fill in personal details on the website form (accessed by clicking on “Account Types” and choosing “Demo Account”).
  2. Download & Install MT4.
  3. Launch MT4, File >Open an account, fill in the account details.
  4. Select demo server Linthrope-Demo.

Please be sure to take note of the user ID and password. Note that you won’t be able to access those details later.

Customer Service

Support is in the office 24 hours a day, Monday through Friday. Available contact methods include a phone hotline, email, and a contact form on the website. The lack of instant support through popular methods like LiveChat, Skype, Whatsapp, etc. is disappointing in today’s modern world, where traders are used to more convenient contact options in general. Considering that support is active 24 hours a day, we would hope to see email responses issue within 24 hours or less, especially under the broker’s lengthy account registration process and with the fact that withdrawal request forms must be requested through email. The contact details are listed below.

Phone: +852-2-12700661

Email:
General & Support Inquiries: [email protected]
Operation Inquiries: [email protected]

Countries Accepted

Linthrope doesn’t provide a list of restricted countries on its website; however, the United States is missing from its registration list. The US is typically on a broker’s blacklists due to stricter regulation laws associated with the country, so it isn’t surprising to see that the option is missing. Sometimes it is possible to bypass the restriction by choosing a similar option like the US Virgin Islands or US Minor Outlying Islands, but this broker’s list doesn’t offer any of those countries, making it entirely impossible to register from the US.

Conclusion

Linthrope is an unregulated forex exchange broker that focuses on the trading of major & minor currency pairs. The broker features the MetaTrader 4 platform and allows for a leverage ratio of up to 1:50. The website is vague when it comes to outlining trading costs, and fails to mention spreads or commission fees entirely. The broker’s account opening process can be time-consuming under a wait time of up to 3 days for approval. The fact that funding is limited to bank wire can also cause serious inconveniences – instant deposits are not possible in cases where margin levels need to be maintained, fees apply, and it can take a longer timeframe to receive withdrawals.

Support is active 24/5, but traders won’t find any instant contact options available on the website, which will slow down the account opening and withdrawal processes. Promotional opportunities are not available and the website only features basic educational resources. Traders should be cautious of the website’s lack of information in various areas, along with the fact that the broker’s terms & conditions aren’t provided. Making a $1,000 deposit without being aware of costs and terms is ill-advised in the risky world of forex trading.

Categories
Forex Service Review

VJ Sniper MT4 Buy/Sell Indicator Review

VJ Sniper is a trading indicator that was created by author Vijayaratna Kumar Boda and launched on the mql5 website in August of 2015. Most recently, the product was updated to version 4.0 in March of 2019. Overview VJ Sniper provides buy signals for uptrends and sell signals for downtrends on the MetaTrader 4 trading […]

VJ Sniper is a trading indicator that was created by author Vijayaratna Kumar Boda and launched on the mql5 website in August of 2015. Most recently, the product was updated to version 4.0 in March of 2019. Overview VJ Sniper provides buy signals for uptrends and sell signals for downtrends on the MetaTrader 4 trading […]

VJ Sniper is a trading indicator that was created by author Vijayaratna Kumar Boda and launched on the mql5 website in August of 2015. Most recently, the product was updated to version 4.0 in March of 2019.

Overview

VJ Sniper provides buy signals for uptrends and sell signals for downtrends on the MetaTrader 4 trading platform. It is based on the close of the previous candle so that traders can enter at the beginning of the candle in order to avoid waiting for the closing of the candle.

Here are a few more facts about the indicator:

  • Works on any timeframe except M1 – M30, H1, H4 are recommended
  • Contains 3 trend bands & signal arrows
  • Best used with Forex instruments
  • Automatically drawn support & resistance line lets traders choose the best signal
  • Does not repaint on low volatile instruments, rarely repaints on high volatile instruments

The developer doesn’t try to lure in traders with promises of amazing results, he is very straightforward about the fact that this product reduces false signals as much as possible and bases its signals off of high profitability. He also explains that it is best to use this indicator in combination with other products, especially Price Action & Candlestick strategies for the best results.

Service Cost

There are two options available for those wishing to acquire the indicator:

  • Rent for $22 USD for one month
  • Purchase for $66 USD

This indicator should be used in combination with other products, so you’ll need to consider the total cost of your investment. A free demo version is also available.

Conclusion

VJ Sniper is an indicator that provides early buy/sell signals based on the closing of the previous candle and high probability uptrends and downtrends in the market. It works best with low volatile instruments and certain timeframes, and in combination with other products. This product has received mostly 5-star ratings, but there are a few one-star reviews in the mix. For example:

“This indicator is 10 times better than Bollinger bands. It gives you more precision and you can determine support and resistance levels way better. For the price this indicator costs it’s almost free.” -PES

“This has to be the best indicator I have ever come across. When used with MACD crossover (if possible) then it works amazing well.” -John

“This one repaints a lot. The arrows and the channel!!! Stay away” -Stephane

Most of the one-star comments, like the one above, mention repainting as the primary issue. The best way to avoid this would be to stick with low volatile instruments. Still, even with a handful of bad reviews, the indicator has still managed to earn a 4 ½ star rating. This could certainly be a useful product when it is put in the hands of a trader who practices effective risk-management while avoiding certain instruments.

This Forex service can be found at the following web address: https://www.mql5.com/en/market/product/11256

Categories
Forex Brokers

PVP / Fox Markets Review

Pro Venture Prime Markets, or PVP Markets for short, is an online forex exchange broker that is located and registered in St. Vincent & the Grenadines. The company provides clients with investment options in currency pairs (majors & minors), metals, commodities, cash indices, and even cryptocurrencies. PVP Markets was established in 2018 and operate as […]

Pro Venture Prime Markets, or PVP Markets for short, is an online forex exchange broker that is located and registered in St. Vincent & the Grenadines. The company provides clients with investment options in currency pairs (majors & minors), metals, commodities, cash indices, and even cryptocurrencies. PVP Markets was established in 2018 and operate as […]

Pro Venture Prime Markets, or PVP Markets for short, is an online forex exchange broker that is located and registered in St. Vincent & the Grenadines. The company provides clients with investment options in currency pairs (majors & minors), metals, commodities, cash indices, and even cryptocurrencies. PVP Markets was established in 2018 and operate as an STP broker, meaning that orders are sent directly to the liquidity provider without the chance of slippage. The company aims to be a “one-stop-shop” that prides themselves in reliability, safety, integrity, and respect for their clients. Keep reading to find out more about the conditions associated with opening an account through this broker.

Account Types

PVP Markets allows traders to choose from two live account types – Standard and ECN, in addition to an Islamic account. Islamic accounts are offered to those that need to adhere to Shariah laws with swap-free 0% interest on overnight positions. Islamic accounts are available upon request. It costs $250 to open a Standard account and the requirement is doubled for the ECN account type. Both accounts offer access to the same impressive leverage cap (1:400), trade sizes, and a number of tradable instruments.

Primary differences stem from the charges associated with each account. The Standard account advertises spreads from 1.5 pips with no commission fees. On the ECN account, traders would supposedly have access to spreads from 0 pips with commission charges of $8.60 per lot. We did find some discrepancies between the advertised spreads and the actual options, so we would defiantly recommend reading this review further to get all of the facts. We’ve provided the conditions for each account type below.

Standard Account
Minimum Deposit: $250 USD
Leverage: Up to 1:400
Spread: From 1.5 pips (Actually from 15 pips)
Commission: None

ECN Account
Minimum Deposit: $500 USD
Leverage: Up to 1:400
Spread: From 0 pips (Actually from 2 pips)
Commission: $8.60

Platform

PVP Markets exclusively features the MetaTrader 4 platform, along with the majority of other foreign exchange brokers. MT4 is the most commonly chosen trading platform for several reasons, including accessibility, built-in features, customization options, a navigable interface, etc. The program also comes with multiple languages and supports everything a trader could need, including the ability to trade micro-lots, Expert Advisors, scalping, hedging, etc. MT4 can be accessed through the WebTrader or downloaded on PC, iOS, and Android devices, including tablets and iPads. Those trading from a Mac computer may have issues downloading the platform and would have easier access through the browser-based version.

We could spend all day going over all of the powerful opportunities within MT4; however, we feel entirely confident that the platform will be a satisfying option for every level of forex trader. The only downside would be the fact that the broker doesn’t offer traders the ability to choose MetaTrader 5 as well, although MT4 still remains the most popular of the two.

Leverage

The broker offers all account holders access to an impressive leverage cap of 1:400 with no conditions. This is a generous offer, especially for the ECN account, which requires a larger deposit. Most brokers set lower limitations and some regulators even set leverage caps at 1:30. Many others refuse to allow a cap higher than 1:100 at most. Traders that don’t have a lot of experience may want to start with a lower option than the one available from this broker, due to the fact that trading with a higher leverage is riskier and can result in large losses. Fortunately, PVP Markets provides traders with room to grow and gives professionals an exceptional leverage cap to trade with.

Trade Sizes

Both accounts allow for a trade size as small as one micro lot. Unlike many of their competitors, PVP Markets places no limit on the maximum trade size and does not seem to limit the maximum number of positions allowed at one time. The broker does impose standard margin call and stop out levels to help prevent accounts from going into the negative. If margin call is reached, then traders would need to close some losing positions or consider depositing more funds. Reaching the stop out level would result in the system automatically closing out trades. Those predetermined levels can be viewed below.

Margin Call/Stop Out levels: 100%/20%

Trading Costs

PVP Markets profits from spreads, commissions, and overnight interest charges. Commissions of $8.60 are charged on the ECN account (likely round turn) and there are no commissions on the Standard account. The spreads offered by this broker and much higher than the advertised amount, so it seems that the trading costs associated with this broker are very expensive. Swap charges are debited or credited on positions that are left open overnight and are based on current rates. The long and short swap rates are calculated by points and the exact rates can be viewed on the website’s product pages. Triple swap is charged on Wednesdays for every instrument in order to account for the upcoming weekend. Islamic account holders would be able to avoid these charges with no interest.

Assets

Both accounts offer access to 28 currency pairs, precious metals Gold and Silver, commodities, cash indices, and a handful of cryptocurrencies. The number of currency pairs is much lower than many other broker’s offers because PVP Markets only features majors and minors with no exotic options. Available commodities include US and UK Oil and there are 5 cash indices to choose from. PVP Markets also expands its available assets to include the popular cryptocurrencies Bitcoin, Ethereum, Ripple, Bitcoin Cash, Dash, and Litecoin. Traders will need to weight the missing exotic options and other categories that are not offered against the ability to trade cryptocurrencies in order to decide if the broker’s asset portfolio is diverse enough to accommodate their needs.

Spreads

If you glance at the broker’s advertised spreads, you’ll be expecting to see options from 0 pips on the ECN account and from 1.5 pips on the Standard account. We checked the products page to confirm and were shocked at how high those spreads actually started from. On the Standard account, the lowest starting spreads were at 15 pips on majors and 25 pips on minors. Minimum spreads climbed as high as 38 pips on minors. On the ECN account, we noticed that standard spreads were at 2 pips on majors and started from 15 pips on minors. This means that average spreads are actually more than ten times the industry average on the Standard account, while spreads on the ECN account are .5 pips higher than average for majors.

Minimum Deposit

The minimum threshold to open an account through this broker is $250 USD. Once considered the average investment amount, this asking amount does seem rather high compared to other options. Some brokers have done away with minimum requirements altogether, while others offer accounts for around $100 or less. Finding out the deposit requirement for the ECN account was rather daunting, as we were forced to reach out to a customer support agent after finding no information on the website or elsewhere online. We were relieved to find that the asking amount was just $500 for an ECN account, where other brokers often ask for deposits in the thousands. Overall, it really comes down to what one can personally afford when considering the investment amounts needed to open either account.

Deposit Methods & Costs

Accounts can be funded through bank wire transfers, M-Pesa, VougePay, Skrill, Neteller, and Bitcoin. Keep in mind that some regulation restrictions may prevent certain methods from being used based on your country of residence. There is a minimum deposit requirement of $100 for the first deposit made through each separate method. PVP Markets will not charge traders for making a deposit but some third-party fees may apply. The website doesn’t actually provide any details about the exact charges associated with each method.

Withdrawal Methods & Costs

All of the available funding methods can also be used for withdrawals, under the condition that funds must be processed back to the original payment method. PVP Markets does not charge a fee on withdrawals from their side, but the website does suggest that third party fees may apply and traders would need to check those fees with their chosen payment provider. Providers like Skrill, Neteller, and other e-wallets often charge a percentage fee from 1% of the total withdrawn amount and up. Banks would likely charge wire transfer fees from their side as well, so traders will want to gain a clear picture of the costs associated with each withdrawal method. It’s a little disappointing that the website doesn’t list those fees more transparently.

Withdrawal Processing & Wait Time

Once a withdrawal request has been submitted, average processing times fall within the first 24 hours. This would be business hours, however, as support does not work on the weekend. The website doesn’t state how long it could take for funds to show up once sent, although we would expect e-wallets to be credited almost instantly. Slower methods like bank wire transfer likely wouldn’t show up for at least a couple of business days.

Bonuses & Promotions

The broker’s website dedicates an entire section to promotional offers and seems to update the current offers periodically. Currently, the only running promotion provides traders with the ability to win an iPhone Max Pro by trading 500 lots. Once an account has been opened and funded, traders would need to email support and the broker would then begin applying traded lots towards the total. We do wish that some type of deposit bonus, or perhaps even a welcome bonus or no-deposit bonus was offered to help out beginners. It’s still nice to see one promotion available and it is possible that the broker will add other opportunities in the near future. If you do decide to open an account, we would highly recommend keeping an eye on this section of the website in case any updates are posted.

Educational & Trading Tools

Traders will find a section labeled “Tools & Education” among the other categories at the top of the broker’s website. Clicking on the option brings a drop-down menu, with the only option being “MT4 Education”. At first glance, we were worried that the website would only offer the basics related to setting up the MT4 program with no real educational insight into other matters. Fortunately, the section actually contains video tutorials related to forex education, alongside 36 video lessons related to downloading and working with the MT4 platform. It would be nice to see more materials like e-books available on the website, although this should provide traders with enough knowledge to get started trading on the MT4 platform. The only thing that seems to be missing would be trading tools, like calculators, calendars, VPS, and other similar options.

Demo Account

Those that would like to open a demo account can do so by navigating to the website’s homepage and clicking “Open Demo Account”. The PVP Markets demo account does not seem to offer customizable options, for example, a chosen amount of virtual funds. This could be somewhat of a disadvantage since many brokers add an unrealistic amount to these accounts. On the other hand, demo accounts serve as excellent simulation tools and serve multiple purposes. Beginners can gain practice without risking any real funds, while more experienced traders may prefer to test out new strategies, try different leverages, or try trading under the broker’s conditions before opening a live account. Whatever the reason, traders will be able to benefit from opening a free demo account through this broker.

Customer Service

Traders can contact support instantly through LiveChat, by clicking on a blue button that is located directly at the bottom right corner of the website. The broker’s LiveChat is rather convenient for the fact that one can leave their email and receive a response there if an agent isn’t online, or if the chat is closed before a response is received. When we tested it, we were initially connected with a bot while waiting for a real customer representative to come onto the chat. The chat window claimed that support usually responds within a few minutes, but it did take about 3 hours for a support agent to respond to our question. Other contact methods include email, or traders can fill out a contact form on the website instead.

The only downsides would be the lack of weekend support and the fact that the broker doesn’t provide a direct phone number anywhere on their website. One could always request a callback, but it seems more convenient to be able to reach out if in a hurry. A few separate email addresses are provided and all of the available contact details have been listed below.

Countries Accepted

PVP Markets welcomes traders from all locations, including the United States, Iran, Japan, etc. Many regulators are strict about these locations, meaning that there is an advantage in the ability to open an account for those located in commonly restricted countries. We tested the registration process from our U.S. based office just to be sure and have no issues opening an account.

Conclusion

PVP Markets offers the choice between Standard and ECN accounts, alongside Islamic accounts. Traders would be able to use impressive leverage as high as 1:400 on FX, metals, commodities, cash indices, and cryptocurrencies from the MT4 platform. The broker doesn’t offer the option to trade exotics, energies, stocks, or bonds. The minimum threshold to open an account is $250, which is high compared to other options. Traders should definitely consider the high trading costs associated with this broker. Beware the spreads that start from as much as 10 times the industry average and the high commission costs on the ECN account. Accounts can be funded through bank wire, card, and a variety of e-wallets.

The broker does not charge fees on deposits or withdrawals from their side but does suggest that third-party fees may be applicable. Support can be reached instantly on weekdays, although agents do not always appear to be active on LiveChat, even during business hours. Currently, traders that register for an account have a chance to earn an iPhone Max Pro by trading a certain number of lots. The website also features multiple video lessons that help to educate traders on forex trading basics and the MT4 platform, and traders can test that knowledge on a free demo account.

Taking everything into consideration, there do seem to be a few advantages associated with opening an account. On the downside, the trading costs are some of the highest we’ve ever seen. Traders would almost certainly be able to access better conditions through another broker, especially with a $250 deposit.

Categories
Forex Videos

Forex Fundamental Analysis For Novices – The Chicago Fed National Activity Index

https://youtu.be/ulJUgO85wqI

https://youtu.be/ulJUgO85wqI

 

Fundamental Analysis For Novices – The Chicago Fed National Activity Index 

 

Thank you for joining our educational video four fundamental analysis for novices. In this video, we will be looking at the Chicago Fed national activity index.


If you are new to trading, one of the most important aspects of a daily trading routine is to analyse economic data releases from the government’s around the world, which reflect the health of that particular nation’s economy. This data can be found on an economic calendar such as this one. Most brokers provide an economic calendar, and you should refer to it every day in order to avoid trading around times of possible extra market volatility surrounding the release of high impact economic data.


The most important aspects of the economic calendar are the time and date of the event, the impact value, which is typically low, medium, and high, and where a high impact event is more likely to cause extra volatility upon its release. The actual data, which is updated in the calendar at the time of the release and is usually subject to an embargo. The consensus – where available – which is the anticipated actual release as put together by economists and analysts, and also the previous data which is usually released weekly, monthly, quarterly, or annually.


As we can see, the Chicago fed national activity index for May will be released at 1:30 BST on Monday, June 22nd, and the impact level is medium and where there is no consensus value, but the previous value for April was – 16.74.


Some brokers’ economic calendars will provide a brief description of the event, and here we can see that the Chicago Fed national activity index, also referred to as the CFNAI on some calendars, Is released by the Federal Reserve bank of Chicago. It is a monthly index design to gauge overall economic activity and related inflationary pressure.

In fact, the CFNAI is actually a combination of 85 indicators covering areas such as housing, personal consumption, employment, unemployment, hours worked, income, production, factory orders, and inventories.
The index measures various aspects of overall macroeconomic activity and was designed by Harvard University. The idea being that all the data can be brought together in one single point in order that policymakers can have a more focused aspect for being able to forecast inflation within the US economy.

The index has an average value of 0 and a standard deviation of 1. Traders will be looking for a positive reading which will be considered as bullish and showing that the economy is improving, but if the value is negative, it implies that the US economy is contracting or in recession and is therefore seen as bearish.


Here we can see that from as early as the 1970’s the index has been fairly tightly confined to its zero-axis. However, for the year 2020, we can see a huge spike lower to the current levels of – 16.74 for April. Of course, this can only be associated with the coronavirus pandemic, and the terrible impact it is having on the United States economy.


Traders already realise that the economy is in a bad state and that the figure is going to be well below the zero-axis. And so there will be no shocks or surprises that the figure is going to be bad. They will be looking for how greatly the number will be with regard to its divergence from the release for May.

Therefore, a lesser minus figure will show that the economy may be bouncing back and may have hit the bottom with regard to the impact from the coronavirus pandemic, and this will be seen as positive or bullish for the economy and where you would find potentially an improvement in the exchange rate for the United States dollar against its counterparts and also an uptick in us stocks and indices.
However, should the minus figure be even greater in value you and the previous release, this will show that the worst is not yet over for the US economy, and we might find that the US dollar loses value against its counterparts and stocks and indices may fall as a result.
The higher the divergence from the previous month’s figure in either direction, the greater the risk of market volatility.

Categories
Forex Chart Basics

How to Establish a Trading Strategy Using Trend Lines and Channels

Introduction

Introduction

Introduction

On financial markets, the price moves basically in three types of trends identified as bullish, bearish, and sideways. Both trend lines as channels allow the “trend following” investor to recognize if the market’s direction changed or if the price action accelerated.

In this educational article, we’ll review how trend lines and channels can help establish a trading strategy.

Trend Lines and Trend Channels

In a price chart, the trend can be described as a price variation across time in a specific and identifiable direction. A trend is said to be bullish when the price creates a succession of higher peaks and higher valleys. On the contrary, in a bear trend, the price action tends to create a sequence of lower peaks and lower valleys. If the market runs in a consolidation stage, developing an overlapped structure, the price moves in a sideways or lateral trend.

When the price action develops an uptrend, the chart analyst projects the trend line connecting the lower highs sequence. In a bearish trend, it is customary that the projection links the lower highs sequence. The following figure illustrates how to trace a trend line. 

In the above figure, the 1-2-3 sequence represents the movement developed by the price action in an uptrend (left) and downtrend (right). When price breaks below (or above) of the trend line, as shown in (4), the price action reveals the potential change in the primary trend. The confirmation of this change comes determined by the retracement that experiences the price, which here tests the trend line and continues in the new trend’s direction, making a higher high.

Trend channels could be considered as a dynamic price range that follows the rhythm of a trend; this technical formation could be bullish or bearish. To draw a trend channel, it’s necessary three points, in an uptrend, two lows and one peak. The channel baseline is the trend line that connects the origin of the movement with the second low. The upper line will be the projection of the baseline traced from the peak between two lows as exposes the following figure.

In an uptrend, the breakout after the second low completion (see figure 01) provides a confirmation signal of the bullish trend continuation. This entry setup for the third movement has its potential target located at the upper line of the channel, acting as a dynamic resistance.

Phi-Channels

Phi-channels is a different type of channel and varies from the trend channel. The main difference with trend channels is that on Phi-channels, the guideline connects the extremes from the origin of the movement with the top of the move identified as 3. Then, parallel lines are projected, creating the channel, using point 2 to trace the channel’s parallel line, as shown in the next figure. 

The resulting projection provides potential turning points, which could offer entry setups combined with other technical tools.

Conclusions

In this educational article, we have seen the use of trend lines and channels that can help establish a trading strategy based on tracking the trend.

In general, the use of trend lines and channels is aimed at seeking to take advantage of the continuity of the trend over the turn of the market’s direction. In this sense, it is convenient to recall the Dow Theory principle, which states that a trend will remain in effect until there is confirmation of its change.

In this context, the use of Phi-channels provides potential areas where the price could react to continue the course of the primary trend, although its use should be supported with other analysis tools.

In the next article, we will look at how to apply the analysis tools to create trading signals.

Suggested Readings

  • Fischer, R., Fischer J.; Candlesticks, Fibonacci, and Chart Patterns Trading Tools; John Wiley & Sons; 1st Edition (2003).
Categories
Forex Market Analysis

Daily F.X. Analysis, July 03 – Top Trade Setups In Forex – U.S. Independence Day! 

A day before, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The news side is a bit muted today, and we may see no major even as the U.S. Banks will be closed in the observance of U.S. independence day.

A day before, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The news side is a bit muted today, and we may see no major even as the U.S. Banks will be closed in the observance of U.S. independence day.

A day before, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The news side is a bit muted today, and we may see no major even as the U.S. Banks will be closed in the observance of U.S. independence day.

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12393 after placing a high of 1.13025 and a low of 1.12232. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair in its early trading session rose to nearly six days high on the back of increased risk appetite in the market. The increased number of jobs created from the United States in June improved market risk sentiment, which raised riskier currency pair EUR/USD pair. However, the pair failed to extend its gains and started moving in the reverse direction after the release of NFP data from the United States.

The EUR/USD currency pair remained well-supportive ahead NFP data from the U.S. due to increased hopes of renewed jobs that increased risk sentiment. After a better than expected rise in job data, the traders started following the results, which were in favor of the U.S. dollar, and the EUR/USD pair came under pressure.

The investors’ appetite was already up after the global economies’ positive data indicated faster recovery after a sharp earlier contraction. However, the second wave of coronavirus continued its fever around the market and kept a lid on investors’ appetite, which reversed the pair’s bullish trend on Thursday.

Meanwhile, the earlier gains of EUR/USD could also be attributed to the attractiveness of shared currency Euro that was under spot after the gradual reopening of the European economy despite the second wave of coronavirus. The persistent monetary stimulus from the European Central Bank and effective control of the virus spread added strength in Euro.

On data front at 12:00 GMT, the Spanish Unemployment Change in June came in as 5.1K against the forecasted -113.0K and weighed on Euro. At 13:00 GMT, the Italian Monthly Unemployment Rate was dropped to 7.8% from the forecasted 7.9% and supported Euro.

At 14:00 GMT, the Producer Price Index from the whole bloc was dropped to -0.6% in May from the expected -0.4% and weighed on Euro. The Unemployment Rate from Eurozone for May was declined to 7.4% against the expected 7.6% and supported Euro.

The Eurozone’s mixed data failed to provide any specific move to the EUR/USD pair on Thursday so, traders continued to follow the U.S. dollar signals for fresh impetus.

On the other hand, from America, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The U.S. dollar strength dragged the rising currency pair EUR/USD in the late session, and hence EUR/USD pair ended its day with a bearish candle.

Daily Support and Resistance

  • R3 1.138
  • R2 1.1328
  • R1 1.1289

Pivot Point 1.1237

  • S1 1.1198
  • S2 1.1146
  • S3 1.1108

EUR/USD– Trading Tip

The EUR/USD is trading in a tight range of 1.1243 – 1.1193, limiting the price action for now. On the lower side, the EUR/USD pair can drop towards 1.1145 level upon the bearish breakout of 1.1193 level, while the bullish breakout of 1.1243 level will allow us to go long. On Friday, the pair may show slow movement in the wake of the U.S. bank holiday. Anyhow, we should look for selling below 1.1295 and buying above 1.1193 level. 

GBP/USD – Daily Analysis

 The GBP/USD pair was closed at 1.24679 after placing a high of 1.25297 and a low of 1.24559. Overall the movement of GBP/USD pair remained flat but slightly bearish throughout the day. The GBP/USD pair extended its previous daily gains and rose near a one-week top on Thursday in early trading hours amid increasing risk sentiment and selling bias around the U.S. dollar.

The increased risk sentiment resulted in the positive momentum around GBP/USD pair after a potential COVID-19 vaccine by the joint efforts from German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer, which gave positive results in its phase1 and phase 2 trials. This, in turn, undermined the demand for safe-haven U.S. dollar and raised GBP/USD pair towards a one-week high level.

The global risk sentiment was further supported by the U.S. monthly jobs report of Non-Farm Payroll. The positive data showed that the coronaviruses worst was probably over, and the hopes for sharp V-shaped recovery again came on board. The intraday profit-taking in GBP/USD was prompted after the risk –on market flow took its pace in the presence of persistent Brexit uncertainties.

In the latest Brexit round of talks, E.U. & U.K. officials failed to make any breakthrough on several vital issues. The negative comment from E.U. negotiator Michel Barnier that there was a still serious gap between Bloc and Britain weighed on GBP/USD pair.

The pair was further dragged in late after the release of a decreased unemployment rate from the U.S., which added strength to the U.S. dollar and dragged the GBP/USD pair with itself. At 17:30 GMT, the Non-Farm Employment Change for June showed that 4.800M jobs were created in one June, which gave strength to the U.S. dollar and dragged the GBP/USD pair from its daily gains. The Unemployment Rate from June also dropped to 11.1% from expected 12.4% and supported the U.S. dollar, which weighed on GBP/USD prices and turned the daily gins in losses.

A meeting between U.K. and E.U. negotiators scheduled for Friday this week has been delayed to next week due to divergence between them. This has raised serious doubts over securing the Brexit deal before the end of the transition period in December. This kept British Pound under heavy pressure and the pair GBP/USD on the downside on Thursday.

Daily Support and Resistance

  • R3 1.2657
  • R2 1.2574
  • R1 1.2524

Pivot Point 1.2441

  • S1 1.239
  • S2 1.2308
  • S3 1.2257

GBP/USD– Trading Tip

The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.495 after placing a high of 107.722 and a low of 107.330. Overall the movement of USD/JPY remained bullish throughout the day. At 4:50 GMT, the Monetary Base for the year from Japan surged to 6.0% from the anticipated 4.2% and supported Japanese Yen, which kept a lid on the additional gains in USD/JPY pair.

At 17:30 GMT, the Average Hourly Earnings from the U.S. fell by 1.2% from the expected decline of 0.8% and weighed on the U.S. dollar. The Non-Farm Employment Change added 4.8M jobs in June against the expected 3.037M jobs and added strength in the U.S. dollar, which raised USD/JPY pair.

The Unemployment Rate from the U.S. for June also decreased to 11.1% from the expected 12.4% and supported the U.S. dollar. The Unemployment Claims from the previous week was not in favor of the U.S. dollar as it surged to1.427M against the expected 1.35M. The Trade Balance from the U.S. showed a deficit of 54.6B against the expected deficit of 53.0B and weighed on the U.S. dollar. At 19:00 GMT, the Factory Orders from the U.S. also declined to 8.0% from the expected 8.6% and weighed on the U.S. dollar.

The Non-Farm Payroll data showed a record high number of jobs created in June by the U.S. economy raised risk sentiment in the market after the hopes of sharp V-shaped economic recovery emerged due to a rise in NFP. It raised USD/JPY riskier assets across the board on Thursday, but the gains started to fell after the release of other economic data. The negative reports related to unemployment claims, factory orders, and trade balance from the U.S. exerted pressure on USD/JPY pair on Thursday.

Daily Support and Resistance    

  • R3 108.79
  • R2 108.48
  • R1 107.98

Pivot Point 107.67

  • S1 107.17
  • S2 106.86
  • S3 106.36

 

USD/JPY – Trading Tips

The USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

Categories
Forex Price Action

How Market Tests You and What You May Learn from It

In today’s lesson, we are going to demonstrate an example of a daily-H4 chart combination trading, which has a good lesson to give us. Usually, daily-H4 combination traders look for a strong reversal candle in the daily chart. Then, they flip over to the H4 chart to trigger entry upon consolidation and a signal candle. We get all these in our today’s example, but the price acts a bit differently after triggering the entry. Let us proceed to find out what happens there.

In today’s lesson, we are going to demonstrate an example of a daily-H4 chart combination trading, which has a good lesson to give us. Usually, daily-H4 combination traders look for a strong reversal candle in the daily chart. Then, they flip over to the H4 chart to trigger entry upon consolidation and a signal candle. We get all these in our today’s example, but the price acts a bit differently after triggering the entry. Let us proceed to find out what happens there.

In today’s lesson, we are going to demonstrate an example of a daily-H4 chart combination trading, which has a good lesson to give us. Usually, daily-H4 combination traders look for a strong reversal candle in the daily chart. Then, they flip over to the H4 chart to trigger entry upon consolidation and a signal candle. We get all these in our today’s example, but the price acts a bit differently after triggering the entry. Let us proceed to find out what happens there.

It is the daily chart. The chart shows that the price produces a bullish engulfing candle at a level of support where the price bounces several times. The combination traders may flip over to the H4 chart now and wait for the price to consolidate and produce a bullish reversal candle.

This is how the H4 chart looks. It looks very bullish. The last candle comes out as a bullish candle closing within a level, where the price gets rejection twice. The pair may consolidate here.

The pair produces a bearish engulfing candle. This is a strong bearish reversal candle. However, the H4 buyers must not lose their hope since the last daily candle comes out as a bullish candle. They must wait with hope.

The next candle comes out as a bullish engulfing candle closing above the level of resistance. The buyers may go trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R. Typically, this is an ideal price action to go long for the daily-H4 chart combination traders. Let us proceed to the next chart to find out what happens next.

The next candle comes out as a bullish pin bar. Look at the lower shadow. The price is about to hit the stop loss. However, if the stop loss is set here accordingly, the entry is safe. Nevertheless, the last candle comes out as a surprise for the buyers. It has three lessons to give us. We will learn them in the conclusion. Meanwhile, let us find out how the entry goes.

The price then heads towards the North with a moderate pace and hits the target. The combination traders make some profit out of the trade. It is good. Let us now find out what those three lessons are.

  1. Look at the daily chart again. See the price consolidates within two horizontal levels. There are two resistances. It means the price does not have enough space to travel towards the North as far as the daily chart is concerned. It may have held some buyers in the H4 chart back to go long in the pair.
  2. Set your stop loss accordingly with some safety pips as well.
  3. Be patient. If a trade does not go according to your expectation, do not panic.

 

Categories
Forex Options

FX Options Market Combined Volume Expiries for 3 rd July 2020

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

………………………………………………………………………………………………………………

FX option expiries for July 3 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

1.1100 569m

EURUSD is in a tight consolidation range on the one-hour chart. The only notable option expiry is out of play. Eurozone data out later and the US has a public holiday in lieu of the 4th July celebrations.

– GBP/USD: GBP amounts

  • 1.2490 508m

 

 

GBPUSD is in a top and tail consolidation range (one-hour chart). The previous top will not likely be revisited today due to the early breakup in Brexit negotiations which ended with a negative tone from both camps yesterday and will not resume again until 20th July.  The bears will be looking for opportunities to short the pair as sentiment turns negative.

– USD/JPY: USD amounts

  • 107.00 749m
  • 107.50 591m
  • 108.00 1.0bn
  • 108.65 400m

USDJPY is in a very tight rage and due for a breakout with the downside looking favourable on the one-hour chart.

– USD/CAD: USD amounts

  • 1.3505 600m

USDCAD is in a bear wedge squeeze and likely break to the downside in thin volumes and where the US dollar took on an unexpected bid tone yesterday after better than expected NFP.

………………………………………………………………….

As you can see on the charts, we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled in red, orange and blue.  Therefore, if you see option expiry exchange rates labelled in red these should be considered in-play, because we believe there is a greater chance of the expiry maturing at these levels based on technical analysis at the time of writing. There is still a lesser possibility of a strike if they are in orange and so these are ‘in-play’ too. However, if we have labelled them in blue, they should be considered ‘not in-play’ and therefore price action would be unlikely to reach these levels, which are often referred to as Strikes, at the time of the 10 AM New York cut.

Our technical analysis is based on exchange rates which may be several hours earlier in the day and may not reflect price action at the time of the maturities. Also, we have not factored in economic data releases or keynote speeches by policymakers, or potential market volatility leading up to the cut.

Although we have added some technical analysis, we suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage. Remember the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 AM Eastern time.

If you want to learn how forex option expiries affect price action in the spot FX market see our educational article by clicking here: https://bit.ly/2VR2Nji

DISCLAIMER: Please note that this information is for educational purposes. Also, the maturities will look more or less likely to become a strike at 10 AM NY time due to exchange rate fluctuations resulting in a different perspective with regard to technical analysis, and also due to upcoming economic data releases for the associated pairs.

Categories
Forex Brokers

FINQ.com Review

Finq.com is a product of Dilna Investments Ltd and Leadcapital Corp Ltd (“LCC”), the latter of which is regulated by the Seychelles Financial Services Authority (FSA) under license number SD007. Since being established in 2017, the company has offered leveraged trading of up to 1:300 on FX pairs and multiple CFD’s, including 2,000 stocks. Aside […]

Finq.com is a product of Dilna Investments Ltd and Leadcapital Corp Ltd (“LCC”), the latter of which is regulated by the Seychelles Financial Services Authority (FSA) under license number SD007. Since being established in 2017, the company has offered leveraged trading of up to 1:300 on FX pairs and multiple CFD’s, including 2,000 stocks. Aside […]

Finq.com is a product of Dilna Investments Ltd and Leadcapital Corp Ltd (“LCC”), the latter of which is regulated by the Seychelles Financial Services Authority (FSA) under license number SD007. Since being established in 2017, the company has offered leveraged trading of up to 1:300 on FX pairs and multiple CFD’s, including 2,000 stocks. Aside from those limited details, the broker doesn’t spend much time telling us about their views and values. Upon further investigation, we found some competitive conditions that revolve around pricing, zero commission charges, and other advantages associated with opening an account through this broker. Of course, no broker is perfect, so stay with us to find out everything you’ll need to consider.

Account Types

Finq.com offers five separate live accounts: Micro, Silver, Gold, Platinum, and Exclusive. The broker is willing to apply swap-free status to accounts in the event that the account holder cannot pay swaps in observance of Islamic religious beliefs. Commissions are not charged on any of the account types and all accounts offer a maximum leverage cap of up to 1:300. One would simply want to make the largest deposit possible, which would result in access to tighter spreads. Deposits of $1,000 USD to $100,000 would grant access to spreads from 1 – 1.9 pips, while making the broker’s threshold deposit of $100 forces one to trade with spreads that are twice the industry average.

Accounts offer access to the same instruments, but the chosen trading platform will affect exactly which instruments can be traded. All accounts feature a dedicated account manager, excluding the Micro account. Gold, Platinum, and Exclusive members receive premium daily analysis and access to trading central. Platinum and Exclusive account holders would have access to “premium customer support”, although the website does not specify exactly what that entails. We’ve provided an overview of each account’s details below.

Micro Account (MT4 & WebTrader)
Minimum Deposit: $100 USD
Leverage: Up to 1:300
Spread: From 3 pips
Minimum/Maximum Trade Size: 0.01/NA
Commission: NA

Silver Account (MT4 & WebTrader)
Minimum Deposit: $1,000 USD
Leverage: Up to 1:300
Spread: From 1.9 pips
Minimum/Maximum Trade Size: 0.01/NA
Commission: NA

Gold Account (MT4 & WebTrader)
Minimum Deposit: $10,000 USD
Leverage: Up to 1:300
Spread: From 1.5 pips
Minimum/Maximum Trade Size: 0.01/NA
Commission: NA

Platinum Account (MT4 & WebTrader)
Minimum Deposit: $50,000 USD
Leverage: Up to 1:300
Spread: From 1.2 pips
Minimum/Maximum Trade Size: 0.01/NA
Commission: NA

Exclusive Account (MT4 & WebTrader)
Minimum Deposit: $100,000 USD
Leverage: Up to 1:300
Spread: From 1 pip
Minimum/Maximum Trade Size: 0.01/NA
Commission: NA

Platform

Traders will have the ability to choose between two platforms, with options being the MetaTrader 4 platform or a proprietary WebTrader platform. MT4 would probably be better suited for FX/CFD traders, while WebTrader is better for traders that are looking to trade equities and stocks, due to the fact that each platform does not offer access to the same instruments. MT4 features 5 asset classes including Bitcoin, while the WebTrader platform offers access to 7 asset classes, including 2,000+ stocks and ETF’s that cannot be traded from the MT4 platform.

 

Both platforms can be accessed through mobile trading on iOS and Android devices or downloaded on PC and Mac. If you’re interested in further specifics, you should know that MT4 offers one-click trading and advanced technical analysis. You can open multiple tabs and windows to access instruments and the platform provides news and fundamental analysis to aid in decision making. WebTrader is designed for quick execution with its primary advantage being access to the 2,100+ instrument options.

Leverage

Leverage caps are dependent on the instrument that is being traded and options differ slightly between the MetaTrader 4 and WebTrader platforms. Options tend to be higher for FX pairs on MT4, where the maximum cap is set at 1:300 on multiple currency pairs. The WebTrader platform offers a similar leverage cap of 1:294 on those same options. Note that some pairs set lower leverage limits, from 1:25 up to 1:200. Both platforms offer a maximum cap of 1:100 on bonds and 1:200 on indices. MT4 offers slightly higher leverage options on some commodities as well. The specific leverage caps for each instrument can be compared under the “Assets” section of the website.

Trade Sizes

All accounts support a minimum trade size of 0.01 (one micro lot). Scalping is not allowed and there is a requirement that states each trade must be opened for at least 2 minutes. A single hedge is possible, but the broker does not allow multiple hedges on the same trading instrument. There is no mention of maximum trade sizes/open number of positions. The broker does mention that a margin call/stop out level is enforced.

Trading Costs

Costs would be paid through spreads, commissions, overnight interest charges, and currency conversion charges. Finq does not apply commission charges to any of their accounts, meaning that all of the costs of placing a trade are built-into the spread. This makes it easier to keep up with the actual trading costs. Those that can afford to make a larger deposit would have access to the most competitive spreads.

A daily financing charge may apply to each FX/CFD open position at the closing of the trading day. The method of calculation of the financing charge varies according to the type of instrument to which it applies. The charge will be debited or credited to/from the account the following trading day. Additional conversion fees may apply on the WebTrader platform if the account’s currency is different than the quoted currency of the underlying asset being traded. Overnight rollover fees are charged 3x on Wednesdays in order to account for the upcoming weekend.

Assets

The broker’s instrument portfolio consists of 55 currency pairs (major, minor, and exotic options), precious metals Gold, Silver, Aluminum, Palladium, Platinum, Copper, and Zinc, plus commodities, 25+ stock indices, 4 bonds, energies, 55 ETF’s, and more than 2,000 stocks. Note that the last two categories (ETF’s and stocks) are only offered on the WebTrader platform and those options cannot be accessed on MT4. Commodities include Corn, Coffee, Rice, Cotton, Cocoa, Sugar, Wheat, and Soybean. Energy options include Heating Oil, Oil, Brent Oil, and Natural Gas. Traders would also have the ability to trade Bitcoin from the MetaTrader 4 platform (WebTrader does not offer this option).

Spreads

Finq.com offers spreads that range from double the industry average at 3 pips on the Micro account, to attractive conditions from 1 pip on the broker’s Exclusive account. The Silver account offers access to spreads from 1.9 pips for a $1,000 deposit and spreads on the Gold account type start from 1.5 pips. The broker only features two accounts with more competitive spreads – the Platinum account, with starting spreads from 1.2 pips, and the aforementioned Exclusive account. Some traders may not be able to meet the minimum deposit requirements on those accounts and would, therefore, be stuck with higher spreads. On the bright side, the broker does offer competitive spreads on Gold, ranging from 0.4 pips on the Exclusive account up to 0.7 pips on the Micro account.

Minimum Deposit

Finq.com asks for a $100 entry-level deposit on their Micro account. This amount is pretty much average, although some brokers have done away with deposit requirements altogether. From there, options climb into the thousands, at $1,000 on the Silver account, $10,000 on the Gold account, $50,000 on the Platinum account, and $100,000 on the Exclusive account, which is the best account available.

The primary goal in opening an account through this broker would be to make the largest deposit possible in order to access better conditions since spreads are the primary differences between all of the accounts. In order to access average spreads, one would need enough funds to open a Gold account. If you’re looking for access to better than average spreads, you’d need to open an account that is at least of the Platinum level. Of course, many traders will be limited based on affordability.

Deposit Methods & Costs

Finq.com accepts deposits through bank wire transfer and credit/debit cards (Visa/MasterCard/Maestro), Neteller, Skrill, and Fasapay. The broker does not apply any commission charges to deposits from their side. It is possible that there could be certain fees charged on the provider’s side, especially if funding through bank wire. We would encourage traders to check for any of those charges before making a deposit in order to avoid any unanticipated charges.

Withdrawal Methods & Costs

The broker follows regular money-laundering prevention steps by requiring withdrawals to be processed back to the same bank account, credit card, or other sources of execution that was used to send the funds. There is a $100 withdrawal minimum for wire withdrawals and the remaining methods require a $20 minimum. It’s possible to request an amount that is below the minimum, but the broker would then apply additional handling and processing fees of $50 on bank wire withdrawals and $10 on additional methods. This could obviously cut into profits significantly. Withdrawals also bare third-party charges, which are not specified. Unfortunately, Finq.com isn’t entirely transparent about withdrawal costs. The website doesn’t even offer a funding page and the only place where we were able to find these terms was inside of the broker’s terms & conditions.

Withdrawal Processing & Wait Time

Withdrawals will be sent the same day that the withdrawal request is received, or the following business day if the request is received outside of normal working hours. The broker does mention that the actual time that it may take for funds to appear in the client’s account would further depend on the processing times of the third-party payment providers.

Bonuses & Promotions

Finq.com currently offers a $50 Welcome Bonus and a Refer A Friend program. Those registering an account will certainly benefit from the broker’s generous initial deposit bonus and those that know someone who might be willing to open an account would be able to earn an amount back based on the referred client’s initial deposit. We don’t always expect to see promotional offers with every broker, so it’s always nice to see something available in this category. We’ve provided some details for both promotions below.

Welcome Bonus: A $50 welcome bonus is offered to each trader who registers an account and completes the verification. Only profits made from trading with the bonus can be withdrawn.

Refer A Friend: This promotion applies a bonus to one’s trading account after a referred friend registers an account and makes an initial deposit. The percentage of the bonus amount depends on the amount of the referred client’s deposit, starting from 20% on deposits of $100 USD to $499, or between $150 – $400 as a cash reward on deposits between $500 and $20,000. Traders can only refer one friend at a time, with a maximum referral limit of 5 people per account.

Educational & Trading Tools

Among the various sections at the top of the broker’s website, traders will find a “Resources” category. While we were hoping to find options focusing on education within the category, the section only features rollover expiration information, CFD expiration dates, a WebTrader FAQ, information on the Refer A Friend program, and an economic calendar. Traders will notice that educational options are missing from the list entirely. Demo accounts are available on the website, but this is the only resource that the broker is willing to provide. The home page does contain a small market sentiment tool, which we have shown an example of below.

Demo Account

Finq.com does provide free demo accounts to those located in accepted countries, but the broker does not offer this service to those located in restricted countries, which include the European Union and the United States. In fact, the website actually blocks those clients from registering a demo account. Since we were writing this review from our US-based office, we were blocked from accessing the demo registration page, so it is impossible for us to comment on whether multiple demo account types are supported and other details.

If you are located in an accepted country, then we would still recommend signing up for a risk-free demo account in order to take advantage of the educational opportunity. We would hope that the broker would feature accounts that model their live accounts and support various starting amounts in virtual currency, in order to provide a more customizable experience.

Customer Service

Support is active 24 hours a day, from 5 pm EST on Sunday evening to 4 pm on Friday evening EST. Traders can contact an agent through WhatsApp, phone, and email. Chat does appear on the website, but support was not active when we tried to use the feature during their advertised business hours. The chat window simply asked us to send a request through email, so this does not seem to be a reliable contact method.

Finq is also active on Facebook, Twitter, and Instagram. The website also mentions that “Premium customer service” is only offered to Platinum and Exclusive account holders; however, no supporting details are provided to let us know exactly what this includes. We’ve provided all of the broker’s available contact methods below.

Phone: +35722008069
WhatsApp: +357 97 712478
Email: [email protected]

Countries Accepted

The website’s disclaimer lists the European Union, United States, or any other country where it would be against local law or regulation as being part of their restricted jurisdictions. As we mentioned earlier, the broker seems to take these laws so seriously that they actually block those clients from registering a demo account. It’s also impossible to access the account registration page because the website recognizes user’s IP addresses and blocks those that are coming from a restricted location. On one hand, it is a good sign to see that Finq takes regulation laws seriously, unlike many shady brokers. However, this could be frustrating for those who won’t have the option to open an account.

Conclusion

Finq.com is an online foreign exchange broker that offers access to 55 currency pairs and 100+ CFD’s on precious metals, commodities, indices, bonds, and the cryptocurrency Bitcoin. If one chooses to trade from the WebTrader platform instead of MT4, then ETF’s and 2,000+ stocks would also be available as well. The broker offers five commission-free accounts with spreads from 1-3 pips. Traders would want to make the largest deposit possible in order to access better spreads, but the broker does accept a low $100 initial deposit for their Micro account type. The website is vague about funding and doesn’t list exact commission charges on withdrawals. There is a $20 withdrawal minimum on card/electronic payment withdrawals and raises the requirement to a more frustrating $100 for withdrawals made through bank wire, otherwise, traders would need to pay additional processing fees.

Customer support is available 24/5 from WhatsApp, phone, and email. Those that register a new account will earn a $50 bonus and a Refer A Friend program is also available as a way to earn extra cash rewards based on the referred client’s initial deposit. Aside from demo accounts, there aren’t any educational resources offered on the website. Demo accounts are only available to those located in accepted countries. The United States and European Union are among those that cannot open an account based on regulatory restrictions. Like many other forex brokers, Finq offers better conditions to those that make larger deposits.

Categories
Forex Brokers

TenkoFX Review

TenkoFX (Tenko Systems Limited) is an online forex exchange broker that describes themselves as being clear, transparent, and strictly regulated. Since 2012, the company has been offering leveraged trading as high as 1:500 on FX, CFDs, and cryptocurrency pairs, all while under the regulatory oversight of the International Financial Services Commission of Belize. The company […]

TenkoFX (Tenko Systems Limited) is an online forex exchange broker that describes themselves as being clear, transparent, and strictly regulated. Since 2012, the company has been offering leveraged trading as high as 1:500 on FX, CFDs, and cryptocurrency pairs, all while under the regulatory oversight of the International Financial Services Commission of Belize. The company […]

TenkoFX (Tenko Systems Limited) is an online forex exchange broker that describes themselves as being clear, transparent, and strictly regulated. Since 2012, the company has been offering leveraged trading as high as 1:500 on FX, CFDs, and cryptocurrency pairs, all while under the regulatory oversight of the International Financial Services Commission of Belize.

The company appears to be located in Nevis, although a UK-based phone number is provided. From three separate live account types, TenkoFX offers separate conditions, including one’s access to certain instruments, leverage options, and commission-rates. If you’re interested in opening an account, stay with us to find out more about the STP, ECN, and Crypto accounts, along with other need-to-know facts.

Account Types

TenkoFX offers three live accounts; STP, ECN, and Crypto. Swap-free Islamic accounts are available in STP and ECN versions. It costs between $10 and $100 USD to open an account, so traders should not be limited based on affordability. One of the biggest differences between accounts would be the tradable instruments that are available.

STP & ECN accounts offer access to currency pairs with additional CFDs on the ECN account. The Crypto account features 29 crypto pairs. Leverage options and stop out levels are also dependent upon the account type, STP account holders will have access to the highest leverage cap of 1:500. The website doesn’t advertise spreads clearly, but options seem to be tight, according to our research.

Commissions also play a factor that will affect the cost of trading. The ECN account offers lower commission charges to those with high equity and trading volume, with higher charges for those that cannot maintain the more significant requirements, so we would only recommend the account to those that can keep the better conditions. The remaining accounts offer reasonable commission rates, although the broker isn’t completely transparent about the STP account’s fees on the website. Account details have been provided below.

STP Account (Islamic accounts available)
Minimum Deposit: $10 USD
Leverage: Up to 1:500
Spread: Variable (See “Spreads”)
Commission: $2 per 1 lot traded
Assets: Currencies & metals

ECN Account (Islamic accounts available)
Minimum Deposit: $100 USD
Leverage: Up to 1:200
Spread: Variable (See “Spreads”)
Commission: $10 – $40 USD per 1 mio (depending on equity & trading volume every 30-day period)
Assets: Currencies, Metals, CFDs

Crypto Account
Minimum Deposit: $10 USD
Leverage: 1:3
Spread: Variable (See “Spreads”)
Commission: 0.5% half-turn
Assets: 29 cryptocurrency pairs

Platform

Every trader that opens an account through TenkoFX will have the advantage of trading from the highly popular MetaTrader 4 platform. MT4 was designed as a powerful, all-in-one option that is highly flexible and navigable. The platform provides a wide range of technical analysis tools while allowing one to execute trades efficiently, generate trading signals, and program MQL-based trading algorithms. Available on desktop, mobile, and through the web-browser, MT4 is also an accessible option that supports trading on the go from various devices, including iPod/iPad/tablets.

The platform allows all types of orders while providing a newsfeed and a wide range of analytical tools. The broker’s website offers the program download directly under “Trading” > “Trading Platform”. MT4 can also be found within the App Store and Google Play Store.

Leverage

On the STP and ECN accounts, available leverage options depend on the account’s equity. The STP account offers a maximum cap of 1:500 on accounts holding up to $25,000 in equity, 1:200 on equity up to $100,000, and 1:100 for amounts up to $1,000,000. The ECN lowers the limits to 1:200 on accounts holding up to $100,000 and 1:100 for equity up to $1,000,000. Amounts over $1 million are negotiable. The Crypto account offers a leverage ratio of 1:3, which is expected for an account that focuses on trading volatile cryptocurrencies.

Trade Sizes

A minimum trade size of one micro lot (0.01) is supported on currencies and crypto pairs, while one mini lot (0.1) is required when trading indices. The broker offers a sufficient maximum trade size of 1,000 lots. The STP account allows for 100 orders to be open simultaneously, while the amount is unlimited on the ECN account. Scalping, algorithm-trading, and news trading are all allowed. Hedging is available with 50% margin release. Margin call occurs at 50% on the STP account, 100% on the ECN account, and 30% on the Crypto account.

Trading Costs

TenkoFX charges account holders through spreads, commissions, and swaps. Commission fees depend on the chosen account type. There is no markup on the STP account, but information suggests a $2 fee per 1 lot traded while a 0.5% half-turn fee is applied on the Crypto account. The ECN account maintains a schedule that depends on the account’s equity and trading volume for the previous 30 days.

Fees range from $10 – $40 USD round turn per 1 mio. Equity of $10K to $50K or more, plus a trading volume of 50,000,000 equals the lowest $10 charge. Equity of less than $1K with less than 5,000,000 trading volume results in the largest $40 fee. Other charges can fall into an $18 – 25 range, depending on the equity and volume, and the entire chart can be viewed under “ECN Trading Fees”.

Overnight interest charges also apply, unless one is trading from an Islamic account, which is available in STP and ECN versions. Swap rates can be viewed on the website under “Contract Specifications”. Triple charges apply on Wednesdays. The broker applies a monthly $10 fee to accounts that have been deemed inactive, with charges occurring until trading activity resumes or the entire balance is depleted.

Assets

TenkoFX offers different instruments based on an account type; STP and ECN account holders have access to 58 currency pairs, which provides a wide variety of choices in majors, minors, and exotics. Metals are also available, with additional CFDs offered on ECN accounts. The Crypto account features 29 currency pairs, including BTC (Bitcoin), LTC (Litecoin), ETH (Ethereum), BCH (Bitcoin Cash), DSH (Digital Cash), ETC, and XRP. The broker allows more than one account to be opened, so a trader could open a Crypto account in addition to one of the other accounts to access more instruments.

Spreads

Aside from listing spreads as floating, the website doesn’t clearly detail what types of spreads one would see. After practicing on a demo account and conducting further research, we found that spreads seem to be lower than 1 pip on average. However, the broker states that conditions on the demo account are less reliable due to ongoing testing of new liquidity providers and that open orders can also affect spreads. This makes us less confident in the more competitive spreads we saw on the demo. TenkoFX may manage to bring those better options to traders due to the fact that commissions apply on the various account types, especially at the high rates on the ECN account applied when traders don’t qualify for the high-volume and higher equity discounts.

Minimum Deposit

TenkoFX accepts deposits as low as $10 on the STP and Crypto accounts while asking for an average $100 USD deposit on their Crypto account. STP accounts can only be funded in USD, EUR, and RUB. ECN and Crypto accounts also accept deposits in MBTC, LTC, and ETH. The ECN account is the only account to accept JPY-based currency.

Even though some brokers have done away with requirements, the broker manages to keep their entry-level amounts at a threshold that is accessible to all traders, and there’s really no reason to deposit less than $10 regardless, otherwise, one’s trading options would be very limited. If one compares this broker’s ECN account type to others, then one would see requirements in the thousands elsewhere. The lower requirements should make it possible for traders to open the account of their choosing without being restricted based on price.

Deposit Methods & Costs

The broker provides a wide range of deposit options, including bank wire transfer, Visa/MasterCard, and China UnionPay, along with e-wallets Neteller, Skrill, QIQI, FasaPay, AdvCash, and PerfectMoney, plus additional cryptocurrency options Bitcoin, Ethereum, Litecoin, and Tether. Aside from bank wire, which has a 24-hour processing time, all deposits are credited instantly. Note that some of the funding methods are not available for all countries and there are a few significant deposit minimums on certain methods.

Bank wire transfer requires a $500 minimum funding amount, China UnionPay requires $1,000, and QIWI asks for $300. The remaining payment providers ask for small deposits of around $1-3. Fee-free deposit methods include all cryptocurrency options, QIWI, and PerfectMoney. Unfortunately, the remaining payment providers do place charges on deposits, and many charge withdrawal fees as well. Applicable deposit fees have been listed below.

  • Bank Wire Transfer: Local bank fees (typically range from $25 and up)
  • FasaPay: 0.5%
  • Visa/MasterCard: 1.5% + 0.5 USD
  • Neteller & Skrill: 1.5% + 0.5 USD
  • China UnionPay: 2.5%
  • AdvCash: 7%
  • Withdrawal Methods & Costs

All of the deposit options are available for withdrawal, under the condition that withdrawals must be made back to the original payment method. Some of the payment providers require large minimum withdrawal amounts. This is especially true for bank wire, which asks for a $500 minimum withdrawal amount – this will potentially leave large amounts of funds stuck in the account and make it nearly impossible to withdraw profits. Steep fees are also charged on wire withdrawals, including a $45 USD charge. The only fee-free withdrawal methods are Tether and AdvCash. Even though AdvCash does offer free withdrawals, traders should note that the payment provider’s 7% deposit fee still makes it one of the most expensive funding methods available. Withdrawal fees for each of the remaining funding methods has been listed below.

  • Bank Wire Transfer: 30 EUR/45 USD/1500 RUB/35 GBP/45 CHF/65 AUD/5,000 JPY
  • QIWI & FasaPay: 0% + 0.5 USD
  • PerfectMoney: 0.5%
  • China UnionPay: 1.2%
  • Visa/MasterCard: 1.5%
  • Neteller & Skrill: 1.5%
  • Bitcoin: 0.001 BTC
  • Ethereum: 0.01 ETH
  • Litecoin: 0.01 LTC

Withdrawal Processing & Wait Time

Withdrawals are processed between 9:00 am and 9:00 pm, GMT+4. Processing is guaranteed to be completed during the advertised processing time for each payment method, which is listed as being within 24 hours. Withdrawal requests made during the weekend will be processed the following Monday. This brings the broker’s processing times down to a relatively quick timeframe when compared to the multiple business days we’ve seen before.

Bonuses & Promotions

Active promotions consist of ECN Gravity, TenkoFX Cashback, The Way of the Samurai, and PAMM Investments. We’ve provided more details for a few of those promotions below.

ECN Gravity: ECN account holders would be given the option to trade for $10 per mln for the first three months the account is open, which equates to a 0.001% (one way) transaction cost. Conditions state that a deposit of at least $1,000 USD must be made to the account. Once the account has been opened and funded, the trader would need to email support to activate the offer.

TenkoFX Cashback: Under this loyalty program, the broker returns funds that were used for trading during the first three months that the account was opened. The broker used a commission multiplier to determine the exact amount of the refund, with $5 being the minimum amount per trade and $100 being the maximum per trade.

The Way of the Samurai: This monthly competition rewards winners (STP & ECN account holders) with a $200 prize. Conditions state that a $100 USD deposit must be made to the account and the goal is to make a steady 10-15% profit every month. Traders can view the countdown timer to the next start date on the broker’s website under “Company” > “Promotions”.

Educational & Trading Tools

Educational resources consist of a training academy that is sorted into beginner and expert levels, a glossary of trading terms that comes with a helpful search bar, and various articles. Granted, the academy section is simply typed information with some pictures, but the broker has put in an amount of effort to attempt to help educate their clients. It’s easy to miss those resources, so one should note that this section of the website can be accessed through the FAQ page.

Analytics is also a major theme, the website offers a forex forecast, forex & crypto news, a technical blog, and an economic calendar under that section. AutoTrade is available. Through the service, one can link their TenkoFX account in order to copy trading transactions straight into their trading account. A trader’s calculator is another convenient tool on the website that can help one determine the cost of placing a trade once all factors, like commissions, spread, and so forth have been added together.

Demo Account

In order to login to a demo account, traders will need to have a Trader Password and use that to login using the following IP address on the MetaTrader 4 platform; mt-demo-01.tenkofx.com:443. The broker mentions that quotes on demo accounts differ from those used on their live accounts, due to the fact that demo accounts are used to test different liquidity providers. This could make one’s experience less realistic. Although the altered quotes don’t take away from the fact that traders can still practice trading in general and on the MT4 platform, it does affect one’s ability to trade under the broker’s conditions, which would be especially helpful considering that information about spreads is vague.

Customer Service

TenkoFX offers 24/5 customer support, with working hours from 9:00 18:00 (GMT+2) Monday through Friday for the financial department. Although the website doesn’t directly feature an instant chat feature, support can still be contacted quickly through the broker’s Skype and Telegram accounts, along with email and phone. From the bottom right corner of the website, the broker also offers a helpful feedback form. Judging from our experience, it seems that traders should expect to receive email responses within about a 24-hour timeframe. However, Skype/Telegram would be the fastest contact methods as long as agents are online. Contact details have been listed below.

Instant Contact Options
Skype: TenkoFX
Telegram: TenkoFX_bot
Phone (UK Landline): +44 190 421 1064
Email
Support: [email protected]
Finance Dept.: [email protected]
Partner Inquiries: [email protected]
PR & Marketing: [email protected]

Countries Accepted

The broker’s website claims that service is not offered to residents of the United States, likely due to stricter regulation laws for the country. On the bright side, the registration form doesn’t actually require one to input their country of residence, and we were able to register from our US-based office with no blocks placed on our IP address. This makes it seem as though the broker’s policy not to accept those clients is rather lenient, which is the case for many other brokers who supposedly blacklist the United States. Fortunately, it seems as though all traders will be able to get through the registration process.

Conclusion

TenkoFX offers leveraged trading of up to 1:500 on FX pairs, some CFDs, and cryptocurrencies from the MetaTrader 4 platform. Traders wouldn’t be able to access the broker’s entire investment library from one account; the STP & ECN account focuses on currency pairs, while the Crypto account features 29 crypto pairs. The website can be vague when it comes to describing spreads and some of the trading costs through commissions. Those that are planning on opening an ECN account will want an equity level above $10K and a higher maintained trading volume, otherwise, commission fees on the account can really add up, at $18 – $40 USD under certain conditions. The broker offers a large range of payment options, including popular options like Visa/MasterCard, in addition to e-wallets and cryptocurrency providers.

On the downside, some of the methods come with steep deposit/withdrawal minimums and fees are charged on nearly all deposits and withdrawals. Withdrawals are processed quickly and the broker has made it easy to reach out to a support agent if need be. The website features a training academy, in addition to news and some convenient trading tools, including AutoTrade and a trader’s calculator. Multiple promotions are available, including a loyalty program, reduced commission, a trading competition, etc. The lenient registration form also makes it possible for everyone to open an account, including US citizens.

Categories
Forex Brokers

Tier1FX Brokerage Review

Tier1FX 2013 is a division of Hogg Capital Investments Ltd, which is an online brokerage-based company that is located in Malta and registered under the regulatory authority of the Malta Financial Services Authority (MFSA) with license number C18954. The company claims that its core values are based on fairness, trust, and integrity, while their regulatory […]

Tier1FX 2013 is a division of Hogg Capital Investments Ltd, which is an online brokerage-based company that is located in Malta and registered under the regulatory authority of the Malta Financial Services Authority (MFSA) with license number C18954. The company claims that its core values are based on fairness, trust, and integrity, while their regulatory […]

Tier1FX 2013 is a division of Hogg Capital Investments Ltd, which is an online brokerage-based company that is located in Malta and registered under the regulatory authority of the Malta Financial Services Authority (MFSA) with license number C18954. The company claims that its core values are based on fairness, trust, and integrity, while their regulatory status of a pure STP broker helps to ensure that their client’s needs are always aligned with theirs. Investment options include FX pairs, cash indices, and cryptocurrency CFDs, all of which can be traded from multiple platforms. If you’re considering this broker, you’ll want to stay with us to find out more about the conditions associated with their live account.

Account Types

Tier1FX features one main account type with STP/DMA execution that asks for an entry-level $1,000 USD deposit. Several of the account’s features can vary depending upon certain factors. For example, one’s access to a higher leverage cap would be based on retail or professional status. Retail clients can only trade with a 1:30 cap, while professionals can use a 1:100 cap and others could supposedly access a 1:200 cap. Commission charges also differ slightly, depending on whether the account is funded in USD, EUR, or GBP. GBP-based accounts pay the lowest charges, while USD-based accounts are charged the highest amount at $1 more round turn.

Average spreads start from a low 0.2 pips on EURUSD. One advantage to choosing this broker would be access to multiple trading platforms. Options include the familiar MetaTrader 4 platform and other options like Fix API, Fortex 6, etc. The account supports micro tradable lots and offers separate stop out levels based on retail or professional status. We’ve provided a quick overview of these details below.

Tier1FX Standard Account

  • Minimum Deposit: $1,000 EUR/USD/GBP
  • Leverage: Up to 1:30 (retail), 1:100 (professional clients), 1:200 others
  • Spread: From 0.2 pips
  • Minimum Maximum Trade Size: 0.01/NA
  • Commission: $4.50 on FX pairs in GBP/$5 in EUR/$5.50 in USD

Platform

The broker provides traders with the ability to choose from multiple trading platforms, including our personal favorite, MetaTrader 4, in addition to JForex, Fortex 6, Fix API, and Fix API through MT4. All of the platforms are accessible via desktop download on Windows, Linux, and MAC, mobile (iOS & Android), and web-based versions. We’ve provided a more detailed list that explains some of the advantages associated with trading through each of the platforms.

MetaTrader 4 (MT4)

  • 30 pre-installed technical indicators, 3 chart styles, 9 timeframes
  • Customizable & navigable interface (multiple colors & layouts)
  • Support for EAs, one-click trading, 35+ languages, and more
  • Most available and preferred platform available among forex brokers

JForex

  • 180+ technical indicators
  • Advanced charting
  • Analytical tools
  • Multiple order features
  • Available in more than 20 languages

Fortex 6

  • Multiple order types, one-click trading, advanced charting and technical analysis
  • Available in multiple languages with a user-friendly interface
  • FIX API (also available through MT4)
  • Runs with a light setup that makes the program ultra-fast
  • Best for those with advanced programming knowledge and skills
  • Supports direct market access and EAs

Leverage

Tier1FX offers different leverage caps based on the client’s categorization. There are two tiers for retail clients, with the basic first-level tier offering a cap of 1:30 on majors as per ESMA standards, 1:20 on non-major currency pairs, 1:10 on commodities other than Gold, and non-major equity indices, and 1:2 on other CFDs. The second-tier offers leverage of 1:100 on all instruments (aside from CFDs on crypto pairs) for retail clients that are considered “professional”.

According to the broker’s website, a trader must possess the experience, knowledge, and expertise to make investment decisions in order to be considered professional. This status can apply to everyday traders, in addition to credit institutions, investment firms, and others. All other clients would be able to trade with a leverage of up to 1:200, but the website doesn’t mention who would actually fall into this category.

Overall, the broker’s leverage limitations are strict, and many other brokers would offer options of at least 1:100 without regarding one’s experience level at all, of course, some regulators force companies to employ the stricter policies. This could help less experienced clients to avoid the pitfall of trading with high leverage without being prepared, which could result in losing a significant amount of invested funds, however, it would be nice to see the broker’s 1:100 cap offered across the board.

Trade Sizes

The broker’s live account supports a minimum trade size of one micro lot (0.01). EAs, hedging, and scalping are supported. The stop out level is set at 50% margin level for retail clients and 100% for professional clients. The website isn’t indicative of maximum trade sizes or whether they differ based on one’s status as a retail or professional client.

Trading Costs

Tier1FX breaks its costs into two categories; basic trading fees, which include spreads, commission fees, and swap charges, and admin fees. The basic fee information that is provided on the website applies directly to retail clients. Institutional and Partner clients can contact the broker for their own tailor-made fee solution. The broker charges commission fees based on the account’s currency. EUR-based account holders would pay $5 (round turn) on FX options, $6 on commodities, and .50 on CFDs.

USD-based accounts would be charged the highest rates, at $5.50 on currency pairs, $6.50 on commodities, and .60 on CFDs. GBP-based accounts offer slightly lower charges of $4.50 on FX pairs, $6.50 on commodities, and .50 on CFDs. All account holders are charged commissions at a rate of 0.10% of the notational value for CFDs on cryptocurrencies.

Traders can view a weekly swaps calendar by navigating to the “Contract Specifications” page and choosing the option underneath the chart. General financing charges are tripled on Wednesdays and triple swaps on CFDs are applied on Fridays. Note that the day on which triple charges are applied or the exact financing amount may change based on National holidays and volatile market conditions.

Admin fees are charged as a $20 USD or 15 EUR/GBP fee on bank wire withdrawals, plus a currency conversion fee that is 500 points over the sport FX rate. Note that the website specifically mentions that admin fees do not include extra charges like a dormant account fee or a maintenance fee.

Assets

Tier1FX offers an impressive 60+ currency pairs, which certainly leaves room for an array of majors and minors, in addition to multiple exotic pairs. Traders will have access to instruments that aren’t always featured with other brokers, especially considering that some cut the number of available FX options in half. Popular metal options Gold and Silver are also offered. On the downside, this broker doesn’t offer much more variety-wise. Ten cash indices are available, with US & UK Oil being offered among those, alongside five cryptocurrency CFDs, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple; however, this is the end of the list.

Traders will find that the variety of currency pairs plus the option to trade cryptocurrencies is ideal, although the fact that commodities, shares, bonds, and multiple other instrument categories are missing is a potential downside, depending on whether one typically trades those types of underlying assets.

Spreads

Average spreads are advertised as being as low as 0.2 pips on the currency pair EURUSD. This is certainly a competitive offer, and we’re happy to report that Tier1FX does offer advantages based on their expensive initial deposit requirement. On the downside, the broker doesn’t provide us with a list or live spread prices, so it is impossible to compare options on the website. The advertised EUR/USD typically has the tightest spreads, so we’d like to know how much higher options can climb on other currency pairs and cash indices. If the broker is really offering such advantageous conditions, it’s odd that they don’t provide spreads for each instrument in order to support their claims.

Minimum Deposit

Tier1FX requires a $1,000 deposit in USD, EUR, or GBP, making it quite expensive to start up an account with them. Elsewhere, traders can find minimum deposit requirements of around $100 or below, and some brokers have even done away with the requirements altogether. If the broker would introduce a lower-status account, like a Mini, Micro, or Cent account with slightly higher spreads, then it may be possible to avoid forcing some of their potential clients to look for another broker based on affordability. Beginners, those that like to make smaller test deposits, or any trader that simply doesn’t have access to a larger amount of funds to begin investment will be affected negatively by the requirement.

Deposit Methods & Costs

Payment methods are limited to bank wire transfers and card deposits. Traders will not be able to fund through any extra e-wallets. Before the first deposit is made, the broker would require a color copy of the front and back of the client’s card. Card copies should be emailed to [email protected] in order to avoid any funding delays. Third-party deposits are not accepted. The broker does not apply fees on incoming deposits, although it is possible that fees may be charged from the issuing bank. Funds are credited to the trading account the same day that they are received.

Withdrawal Methods & Costs

All withdrawals are credited back to the same bank account or card that was used to make the deposit. Profits can only be withdrawn to bank wire due to anti-money laundering policies. Tier1FX applies the aforementioned $20 USD or 15 EUR/GBP charge from their side on outgoing wire transfers. This amount is charged on top of any banking fees, which are typically $20 – $50 USD, depending on the particular bank. The broker directs clients to visit the “Transfers” section within the Client Portal to view any applicable fees on card deposits. It’s a little disappointing that the website is less than transparent about those fees.

Withdrawal Processing & Wait Time

Withdrawal requests are processed by the company within 1 business day. Once funds have been sent, it may take several days for the amount to show up on the client’s card. In the case of non-SEPA bank transfers, it can take 5-8 business days for funds to be received in the bank account.

Bonuses & Promotions

The broker does not offer any bonuses or promotional opportunities. Traders shouldn’t hold out hope that these features will be added in the future since the company claims that they have decided not to pursue extra offers in lieu of investing in first-class liquidity, execution, and technology instead. This seems like a convenient excuse not to offer bonuses to their clients.

Educational & Trading Tools

Tier1FX only manages to offer demo accounts as their sole educational resource. Demo accounts could be considered the bare-minimum in education, so we aren’t impressed by the option considering that we would expect all forex brokers to provide them. As for trading tools, the website is even more barren of options. Granted, the broker’s supported trading platforms do come with some built-in tools, but even MT4 doesn’t come with an economic calendar or various trading calculators.

Demo Account

Demo accounts are available through the broker’s website for any trader that would like to use one. The broker imposes a 60-day time limit before a demo account will expire. This is better than the one-month expiration period implemented by many other brokers, but we always prefer to see unlimited demo accounts. Support is willing to consider requests to extend the life of the demo account, so long as one reaches out to support before the account expires, but this seems rather inconvenient when this should be available automatically. Fortunately, the account opening process is convenient and can be completed in less than five minutes. The broker also offers demo accounts on multiple platforms, which could be used to test out some of their available options.

Customer Service

The broker’s customer support team is in the office 24 hours a day Monday-Friday. Tier1FX explains that they try their best to respond to all inquiries within 10 minutes, whether the chosen contact method is LiveChat or email. There are also two direct phone lines available. The 10-minute timeframe is certainty advantageous, considering that some smaller brokers can take 1-2 business days to respond to email requests. All contact information has been listed below.

Phone
Office Hours: +356 23 27 3000
24/5 Support Line: +356 23 27 3999

Email
Sales: [email protected]
Support: [email protected]
Applications: [email protected]
General Info: [email protected]

Countries Accepted

Tier1FX does not offer services to clients from the USA, North Korea, Iran, Japan, and Spain. If one chooses any of those options on the sign-up list, a message will be displayed stating that service is not currently available to those clients. One possible away around this restriction would be to sign-up from the US Minor Outlying Islands for US clients, however, most of the restrictions are enforced. Tier1FX likely blacklists the aforementioned countries due to the fact that they are a more reliable regulated broker.

Conclusion

Tire1FX is a regulated forex exchange broker that offers 60+ currency pairs, metals, cash indices, oil, and CFDs on cryptocurrencies. The broker’s investment list may be missing some familiar options and leverage options are restricted to 1:30 for most retail clients. Multiple trading platforms are available, including the most popular MT4, in addition to several other options.

The broker features one live account with a steep $1,000 USD/EUR/GBP deposit requirement. On the upside, the account does offer low spreads from 0.2 pips, with commission charges being based on the type of the account’s currency. Funding options are limited to bank wire and card deposits. The broker charges a high 15 EUR/GBP or $20 USD fee on outgoing wire transfers on top of fees that are already charged from the bank’s side. The website isn’t transparent about fees on outgoing card deposits.

On the plus side, withdrawal requests are processed within one business day. The broker offers 24/5 customer service with an estimated 10-minute response time through LiveChat, email, or phone. As for promotional offers, trading tools, and educational resources, the website doesn’t have anything to offer, aside from demo accounts, which are expected. If one can afford the broker’s minimum deposit and finds the leverage options and tradable instruments to be sufficient, then there are certainly some advantageous trading conditions. Otherwise, it may be best to look for a broker with lower entry-level deposits and extra additional options.

Categories
Forex Daily Topic Forex Fundamental Analysis

Understanding ‘Retail Sales MoM’ Fundamental Forex Driver

Introduction

Introduction

Introduction

The Month-over-Month Retail Sales figures are one of the closely watched statistics in the financial markets and have a lot of volatility in the markets around these figures. An increase in sales is one of the earliest signs of growth for businesses that can imply a multitude of things for the economy. It is a closely watched high impact leading indicator. Hence, an understanding and analysis of Retail Sales are paramount for our fundamental analysis.

What is Retail Sales Month-over-Month?

Retail Sales

In the purest sense, it is just the dollar amount of purchase of goods and services made by end-consumers for a given period. Here, the period is MoM, which stands for Month-over-Month. It is the sale of durable and non-durable goods at the retail outlets to consumers.

It can also be defined as the purchase of finished goods and services by consumers and businesses. The goods and services have reached the end of the supply chain. The chain generally starts with the manufacturer or provider and ens up at the retailer where the general population or other businesses consume it.

The Retail Sales figures are often presented in two ways: including and excluding auto and gas sales. As the Auto (vehicle purchase) figures and Oil prices fluctuate frequently, the exclusion helps to identify the trends better once the volatile components are removed. The excluded version is called the Core Retail Sales report.

Retail Sales statistic covers the in-store (retail) sales, catalog sales, and out-of-store sales of durable (goods that last more than three years) and non-durable goods (that have short-life span). The major categories include:

Retail Stores have the following categories:

How can the Retail Sales MoM numbers be used for analysis?

The Retail Sales figures provide us a reliable measure of CURRENT economic activity. It is essential to an objective assessment of the need for and impact of a broad range of policy decisions. Hence, the policymakers use this statistic to keep a pulse-check on the economy’s health.

The Retail Sales figures are significant statistics for many as the Consumer Spending makes up 66% of the United States Gross Domestic Product. The remainder is from Government Spending, Business Spending, and Net Exports. It is also essential as it represents the end of the supply chain figures. All the statistics that precede the Retail Sales figures like Inventory Changes or Manufacturing Production figures all lead up to the Retail Sales, which confirms and triggers the next wave in the trend change in the other indicators, in a feedback loop.

In other terms, once Retail Sales figures improve, businesses see an increase in their revenue and correspondingly demand their products, which leads to an increase in their Manufacturing Production figures, and that would later translate to Change in Inventory statistics. So, we see how the Retail-Sales figure operates amongst the economic indicators in a feedback loop cyclical pattern.

Once Retail Sales figures improve, businesses see profits that encourage expansionary plans, that would increase investment in their business, employment, or even wage growth. It is necessary to understand, Sales improve business, once business improves, wage growth or employment increase is a possibility. Hence, the Retail Sales figure is an essential leading macroeconomic indicator for our fundamental analysis.

The US Bureau of Economic Analysis releases quarterly GDP statistics. If the Month-over-Month Retail Sales figures have been influential, then there is a good chance that the GDP print will be higher. The only downside to the Retail Sales figures that we need to be careful of is that it does not account for inflation, and the increase in the Retail Sales figures could also be a by-product of inflation.

To be noted: The Retail Sales figures are seasonal. It generally tends to increase around the holiday season. Hence, care must be taken during analysis that the decline in stats is due to a business slowdown or seasonal effects. In this case, the Retail Sales figures Year-over-Year is also another parameter that we can use to compare the current conditions with the preceding year to understand the growth trend better, as the GDP is also compared with the last year.

Although data is available in the seasonally adjusted format, to account for the seasonal patterns but it does not adjust for inflation. Hence, it is essential for users of the data to check for the seasonally adjusted figures.

Impact on Currency

Retail Sales is a leading macroeconomic high impact indicator. An increase in Retail Sales is the first sign of growth for businesses in monetary terms. Due to a multitude of economic factors that are affected by the Retail Sales figures, the volatility around the release of these figures is generally high.

It is a proportional indicator, meaning that a consistent or significant increase in the Retail Sales figures translates to increased profits for the businesses, indicates reasonable Consumer Confidence and Consumer Spending, and in turn it will also translate to increased employment, and wage growth. It is a cyclical effect that further promotes spending, and business booms and the economy prospers. It translates to higher GDP prints, which is appreciating for the currency.

Low Retail Sales figures are indicative of a slowdown of business, bearish Consumer Sentiment, where consumers are saving more and spending less. It stagnates the businesses, in the worst case, could lead to lay-offs, and ultimately recession. It will translate to lower GDP prints, which is depreciating for the currency.

Economic Reports

In the United States, the Census Bureau publishes monthly reports of the Retail Sales figures on its official website under the section “Monthly Retail Trade.” The report is released at 8:30 AM about two weeks after the reference month (13-15th day of the month). The schedule for the year is already posted on the website for the user’s convenience. The report details the total sales, percentage changes, and also YoY (Year-over-Year) changes.

Sources of Retail Sales MoM

  • The Month-over-Month Retail Sales statistics can be found here
  • Both advance estimates and Retail Sales figures are available in aggregated format in St. Louis FRED website here
  • We can find Retail Sales monthly figures for various countries here

Impact of the ‘Retail Sales – MoM’ news release on the Forex market

In the previous section of the article, we understood the Retail Sales economic indicator and its consequences on the economy. We will take this discussion forward in identifying the impact of Retail Sales on the value of the currency. Retail Sales is an important economic indicator because consumer spending drives much of our country.

When consumers spend more, the economy tends to hum along, whereas if consumers are uncertain about their financial future, they hold off their purchases that lead to the slow down of the economy. The release of Retail Sales numbers is said to have a large impact on the currency, as shown in the below image.

In this section, let’s analyze the Retail Sales data of the Unites States that was gathered in the month of March. The below image shows that there was a big drop in the Retail Sales compared to the previous month indicating a major disruption in the economy. Let’s see how the market reacts to this data.

USD/JPY | Before the announcement

We will start with the USD/JPY currency pair to witness the impact of the news announcement. The above image shows the state of the chart before the news announcement, where we see that the overall trend of the market is up, and currently, the price is on the verge of continuation of the trend. Depending on the impact of the news, we will position ourselves in the currency pair.

USD/JPY |  After the announcement

After the news announcement, there is a surge in the price, and volatility jumps to the upside. Even though the Retail Sales were very poor in the month, the market reaction was opposite to what was expected. After the news release, traders bought US dollars and strengthened the currency much more. The bullish ‘news candle’ shows the impact of the news on the currency. Since the market reacted very positively to the data, we should take a ‘buy’ trade only after a price retracement.

EUR/USD | Before the announcement

EUR/USD | After the announcement

The above images represent the EUR/USD currency pair, where we see that the market is in a significant downtrend indicating the great amount of strength in the US dollar. The price is currently is at its lowest point, which means we need a pullback in the market to join the trend. If the news announcement results in a retracement of the price, this could be taken as an opportunity for taking a ‘short’ trade.

After the news announcement, the market moves lower, and volatility increases to the downside. Although the Retail Sales data was weak, it did not result in weakening of the currency, but rather the US dollar strengthened. This means the news data was not bad enough to turn the markets to the upside. We will still be looking to enter the market only after a price retracement to a key technical level.

USD/CAD | Before the announcement

USD/CAD | After the announcement

The above price charts are of the USD/CAD currency pair, where we see that the market is aggressively moving up with almost no price retracement. This indicates the US Dollar is very strong, or the Canadian dollar is weak. In any case, we will join the trend only if the price retraces to a ‘support’ or ‘demand’ area.

After the news announcement, volatility expands on the upside, and the price closes, forming a bullish ‘news candle.’ Here too, the Retail Sales data has an opposite impact on the currency as the market reacts positively to the data even though the Retail Sales were largely lower in this quarter. It is advised not to chase the market after the news release since it against the rules of risk management.

We hope you understood Retail Sales MoM fundamental Forex driver and the relative impact of its news announcement on the Forex price charts. Cheers!

Categories
Forex Videos

Forex Expiry Options Review 19-06- 2020! Making Forex Easy!

https://youtu.be/U4Ku8-fx5xU

https://youtu.be/U4Ku8-fx5xU

 

FX Options Market Combined Volume Expiries. A weekly retrospective review for the financial week ending: 19, 06, 2020

 

Hello everybody and thank you for joining us for the daily FX Options Market Combined
Volume Expiries review for the trading week ending on Friday, 19th June 2020. Each week we will bring you a video taking a look back at the previous week’s FX option expiries and how they may have attributed to price action leading up to the maturities which happen at 10 a.m. Eastern Time, USA.

If it is your first time with us, the FX currency options market runs in tandem with the spot FX market, but where traders typically place Call and Put trades on the future value of a currency exchange rate and these futures contracts typically run from 1 day to weeks, or even months.


Each morning, from the FA website, our analyst, Kevin O’Sullivan, will bring you details of the notable FX Options Market Combined Volume Expiries, where they have an accumulative value of a minimum of $100M + and where quite often these institutional size expiries can act as a magnet for price action in the Spot FX arena leading up to the New York 10 a.m. cut, as the big institutional players hedge their positions accordingly.

Kevin also plots the expiration levels on to the relevant charts at the various expiry exchange rates and colour codes them in red, which would have a high degree of being reached, or orange which is still possible and where these are said to be in-play. He also labels other maturities in blue and where he deems it unlikely price action will be reached by 10 a.m. New York, and thus they should be considered ‘out of play.’ Kevin also adds some technical analysis to try and establish the likelihood of the option maturities being reached that day. These are known as strikes.
Please bear in mind that Kevin will not have factored in upcoming economic data releases, or policymaker speeches and that technical analysis may change in the hours leading up to the cut.
So let’s look at a few of last week’s option maturities to see if they affected price action. Firstly, there were no notable options for Monday 15th June.


There were two expiries for the Euro US Dollar pair at 1.1260 and 1.1300.
Kevin said that the pair was oversold during the early morning session. And that the likeliest candidate would be a strike for the 1.1260 one.


Here we can see that price action gravitated around the 1.1260 level during the late morning and early US session.


And we can see that the spot price was 1.1277 at the cut. Just 17 pips away.

The second set of option expiries were with the USD Japanese Yen pair. And here is the early market analysis. Kevin suggested the price action would remain at the current levels as the two expiries were close to the spot price, and they were large in value.

And here we can see price action did as expected.


And here we can see the price action at the 10 a.m. cut was 107.38 which was 23 pips
above the 107.15 option.


Tuesday the 16th saw two maturities at 1.1300 and 1.1250 and where the emphasis was placed on the bull trend with the caveat that there was ZEW data coming from Germany and Retail sales from the USA, which came in much stronger than expected and gave the Dollar a lift. As such, the pair’s bull run faded.


The price action left a huge void, and the pair drifted lower, reaching 1.1269 at the cut, just 31 pips lower than the 1.1300 maturity.


There was also a maturity at 107.30 for the USD Japanese yen pair, and the analysis was that the pair was in a tight consolidation phase.


At the time of the cut, the pair hit 10742, just 12 pips away from the maturity and in line with the analysis as provided by Kevin


On Wednesday, there were two option expiries for the USD Japanese yen pair as e can see here, and Kevin suggested that price action was in a continual sideways consolidation period and likely to remain there.


At the time of the cut, the exchange rate was 107.26. Just a single pip away from the maturity at 107.25. remember some brokers will have been quoting 107.25 in which case this is likely to have been a strike.


DolCAD had a maturity at 1.3500 on Wednesday.


Price action maintained the downward pressure but eventually broke out of the wedge to the
upside and hit 1.3563 at the cut.


Also, on Wednesday, there was a maturity for the EUR GBP pair. Kevin’s analysis suggested

that the pair was overbought and likely to pull back to the 0.8925 option maturity.


Here we can see that price action did indeed pull lower. A nice trade had you gotten in and sold the pair in the morning. Price fell to within 13 pips of the maturity and remained in a downward trend well into the European and US session.


However, here we can see that the exchange rate at the cut was 0.8946, just 20 pips higher.


Turning our attention to Thursday, we have three option expiries for the USD Japanese Yen pair. And this is Kevin’s analysis at around 8 a.m. BST, where he calls all three as out of play and suggests price action will conform to the support becoming resistance theory.


Let’s fast forward, and we can see price action did exactly what was expected, it followed the support becoming resistance pattern, and all three options remained out of play.


And here, we can see that the exchange rate was 106.76 at the cut.

Still, with Thursday, there were three options with EURO USD, and Kevin’s early analysis was that price would likely come for a retest of the 1.1200 level if the 1.1250 could be breached. If not, the two red options would remain in play.


Fast forward a few hours, and we can see that 1.1250 was breached, and that price action did test the 1.12 level.


Before the exchange rate hit 1.1212 at the time of the cut.

Please remember, Kevin’s technical analysis is based on exchange rates, which may be several hours earlier in the day and may not reflect price action at the time of the maturities.
We suggest you get into the habit of visiting the FA website each morning just after 8 a.m. BST and take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage.
Remember, the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 a.m. Eastern time.
For a detailed explanation of FX options and how they affect price action in the spot forex market, please follow the link to our educational video.

Categories
Forex Videos

Forex Position Size! The most crucial factor in trading!

https://youtu.be/eXjH8cZq9YY

https://youtu.be/eXjH8cZq9YY

Position Size: The most crucial factor in trading

 


Bob is an average guy that has seen the Forex markets as a way to get rich quickly. He has seen lots of accounts on copy-trading sites jumping from $1,000 to $1 million in less than one year and dreams about doing the same with his, but he lost it all in less than a month. Indeed it might be possible to raise an account from $1,000 to $1,000,000 in 12 months, but the odds of achieving that feat are low because the risk of bankruptcy is too high. Most people think they are smart but are mostly focused on forecasting the market. It is now natural to have the skills for position sizing decisions.

Even high intelligence does not help. Ralph Vince directed an experiment on position sizing utilizing forty PhDs. They were initially given $10,000 in a computer game with 100 bets having a 60% chance of winning each bet. The rules were that they would win or lose the amount they bet. The game had a clear edge for the players, but only 2 PhDs end up making money. The other 38 PhDs ended with less than the initial $10,000. The main reason for this result was that almost all the Ph.D. players risked too much money on each bet. The other interesting fact is that even when the game was profitable, almost nobody made money.
This result is what is typically found in the Forex markets. People start with a tiny account and want to obtain even double their initial funds every month. As a consequence, people apply extremely large position sizes that get their account wiped out at the first market turn against them.


Let’s say you have $4,000 in your account and risk $1,000 on each trade. A losing streak of four trades will wipe your account. Losing streaks are common in trading, and four losing positions in a row is a very common event. Even 10 to 20 consecutive losses are possible in some trading systems, that are quite profitable using appropriate position sizing, but deadly when overtrading.

This experiment shows that position sizing is the component of a trading system that allows the trader to optimize the profits. That means, from zero to one, there is an optimal fraction of the trading capital, which, when risked on each trade, will optimize the results of a trading strategy.


Of course, that optimal fraction may result in a max drawdown much higher than psychologically accepted by the trader. Thus, a limitation on the trade size should be set by this parameter.
The best description of what a proper position sizing strategy should do was written by Curtis Faith in his book Way of the Turtle: “the art of keeping your risk of ruin at acceptable levels while maximizing your profit potential.” If we combine profits and drawdowns into the concept of “trading objectives,” then, Position Sizing is the art of achieving the trading objectives.
Finally, the key goal any trader should aim at is to find a system with a positive edge and then trade it using position sizing levels that allow him to achieve his trading objectives.
In the following videos, we will explore several position sizing methodologies that will help forex traders optimize this crucial part of their trading profession.

Categories
Forex Course

138. How to Identify Potential Market Reversals?

Introduction

Introduction

Introduction

In the previous lesson, we discussed the concept of retracement and reversal. We also understood how they are different from each other. However, just knowing if the terminology will not help in the forex market. Being able to predict if the price is retracing or reversing is the name of the game because this will significantly bring down your losing trades and increase the number of winning trades.

Retracement or Reversal?

In technical analysis, there are several ways to predict if the market is undergoing a retracement or a reversal. Here are some of the ways to differentiate between the two.

Fibonacci Retracement

Fibonacci retracements are very popular in technical analysis space. They are based on a sequence of key numbers identified by Leonardo Fibonacci, a mathematician.

In technical analysis (trading), Fibonacci retracement is drawn by taking two extreme points on a price chart, which results in different levels or ratios – 23.6%, 38.2%, 50%, 61.8%, and 100%. These Fibonacci ratios are used by traders to determine possible support and resistance levels in the market. Typically, these are the level where the price tends to hold and reverse from the current direction. Having that said, the price does not hold at every Fibonacci level. It holds perfectly only when it is combined with the price action on the charts.

Consider the below chart of EURCAD. In the recent chart, we see that the market is in an uptrend. The grey ray represents the support and resistance level. After making a higher high, the price has retraced to the S&R level.

Now the question arises if this retracement is a pullback to the uptrend or a potential reversal. To figure this out, we shall apply the Fibonacci retracement to the chart.

In the below chart, we have incorporated the Fibonacci retracement onto the price chart. If we look at the same S&R level, we see that the price is also holding at the 38% level. Hence, this gives us double confirmation that the market is preparing to head north. And in hindsight, the price does make a higher high.

Market Transition

Traders, especially Price Action traders, study the movement in the prices to determine if the market is preparing for a possible reversal. If a market is going for a reversal, the market gives simple yet effective hints and clues about it. The violation from the definition of a trend is the clue that the market is possibly going to turn around for a reversal.

Let us consider the example of a reversal to the upside. Initially, the market will be in a downtrend, making lower lows and lower highs. But, when it retraces and tries to make a new lower low, it leaves equal low. This becomes our first clue on a market reversal. From the point of the equal low, it rallies up but fails to make a lower high.

Instead, it makes an equal high. These two hints are an indication that the price is not moving according to the definition of a downtrend, and there could be a possible reversal. To confirm the same, we wait for the price to make a higher low. If it does make a higher low, instead of a lower low, we can predict that the market is preparing to head north.

Below is a self-explanatory illustration for the above explanation.

Take the below quiz to check if you have got the concepts correctly. Cheers!

[wp_quiz id=”79321″]
Categories
Forex Basic Strategies

Trading The CAD/JPY Pair Using ‘Commodity Correlation Strategy’

Introduction

Introduction

Introduction

Oil is one of the largest commodities in the world that is traded heavily. The reason for high liquidity is that it is a basic necessity. It is needed to run factories, machinery, ships, and cars. Canada is one of the largest exporters of Oil, and it forms a major part of the total volume of commodities exported. Due to these reasons, Canada is positioned in the world’s top ten oil-producing nations, and as a consequence, it’s economy is severely impacted when oil prices decline. Many traders today predict the movement of the Canadian dollar using the price of Oil.

When oil prices rise, the Canadian dollar tends to strengthen. Similarly, when oil prices are low, the Canadian dollar tends to weaken. Japan, in contrast, is considered as the net importer of Oil. So, when oil prices rise, Japanese yen weakens, and when oil prices drop, Japanese yen strengthens. Many traders are not very comfortable trading Oil due to the volatility it possesses.

An alternate and improvised way trading oil directly would be to utilize knowledge of oil prices to trade the CAD/JPY currency pair. As Canada is the net exporter and Japan is the net importer of oil, oil price becomes a major indicator for the movement of the CAD/JPY currency pair. That is why we have named this strategy a ‘Commodity Correlation Strategy.’ Let us dive into the strategy and explore the steps involved.

Time Frame

The commodity correlation strategy works well with the daily (D) and weekly (W) time frame charts. Swing trading is the most suitable trading style for this strategy as it has a long-term approach to the price. Therefore, the strategy cannot be used for day trading or on 4-hours’ time frame chart.

Indicators

We use just one technical indicator in this strategy, and that is the Average True Range (ATR) to set the stop loss for the trade. We don’t use any other indicator during the application of the strategy. If one is not familiar with the ATR indicator, it is recommended to refer our article on ATR before understanding the strategy.

Currency Pairs

This strategy can be used with CAD/JPY currency pair only, with the movement of oil prices as our leading indicator.

Strategy Concept

The price movement of crude Oil is used as a reference to catch a ‘trade’ in CAD/JPY currency pair. Key levels of support and resistance on the crude oil chart are used to spot long and short opportunities in CAD/JPY pair. If price closes above resistance on the oil chart, a long trade is activated on the CAD/JPY the following day. Similarly, if the price closes below support on the oil chart, a short trade is triggered on the CAD/JPY the following day. The risk to reward of trade taken based on this strategy is a minimum of 1:2, which is above normal. A bigger target can be achieved by allowing the trade to run.

Trade Setup

In order to explain the strategy, we focus on the price chart of crude Oil and CAD/JPY currency pair. We are not concerned with any other forex pair. The strategy can be easily understood by those who have basic knowledge of support and resistance.

Step 1

Firstly, we need to open the chart of crude Oil and then find key levels of support and resistance. After marking support and resistance levels, we wait for a breakout or breakdown of the range. After the breakout happens, make sure that the breakout is real and a faker. A close candle well above the resistance area gives us a confirmation of the breakout, and thus we can expect a continuation of the price in the direction of the breakout.

The below image shows how the breakout should be along with the confirmation candle.

Step 2

Now, we need to open the chart of CAD/JPY currency pair and locate the price on the day when the breakout took place on the oil chart. Since the breakout on the oil chart is above the resistance, we will ‘long’ in CAD/JPY currency pair after a suitable confirmation sign from the market. A bullish candle on the next day is the confirmation signal for going ‘long.’ In a case of a breakdown below the support, a bearish candle in the CAD/JPY pair on the next day of the breakdown is suitable for going ‘short’ in the pair.

In the above example, we see the formation of a bullish candle on the following day, which triggers a ‘buy’ trade. Let us see what happens further.

Step 3

In this step, we determine take-profit and stop-loss levels for our strategy. The stop loss for this strategy is calculated by multiplying the value of ATR by 2. The stop loss is placed by the number of pips obtained after performing the calculation. The take-profit is placed at the price where the risk to reward of the trade will be at least 1:2. However, in most cases, the trade has the potential to provide move higher.

In this example, the risk to reward of the trade was 1.5 as the major trend was down.

Strategy Roundup

Using the Commodity Correlation Strategy, traders can take advantage of the positive correlation between Crude oil prices and the CAD/JPY currency pair. This strategy is especially suitable for traders who want to trade in Oil but do not enjoy the volatility associated with it. This strategy is also suitable for traders who do not have the time to day trade and prefer long-term positions in the pair.

Crude Oil has the highest correlation with CAD and JPY Forex pairs. Hence we have considered these asset classes. You can use this strategy for different Forex pairs depending on which commodities they are correlated with. We hope you found this strategy informative. All the best.

Categories
Forex Options

FX Options Market Combined Volume Expiries for 2 Nd July 2020

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

………………………………………………………………………………..

FX option expiries for July 2 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

  • 1.1135 944m
  • 1.1200 564m
  • 1.1210 1.1bn
  • 1.1230 566m
  • 1.1250 2.4bn
  • 1.1275 508m
  • 1.1300 1.9bn
  • 1.1330 695m
  • 1.1400 524m

EURUSD pair is overbought on the one-hour chart, having broken above a tight range around the 1.12 key level yesterday. Eurozone data and US data including NFP out later may cause more turbulence in the pair.

– GBP/USD: GBP amounts

  • 1.2350 537m
  • 1.2360 248m
  • 1.2450 609m
  • 1.2500 201m

GBPUSD has been on a bull run for 2 days and is just seeing some profit taking at the 1.25 level. Expect more buoyancy but the slew of US data out later will likely cause volatility.

– USD/JPY: USD amounts

  • 106.00 696m
  • 106.50 556m
  • 106.75 440m
  • 107.00 474m
  • 107.50 950m
  • 107.71 450m

USDJPY is consolidating in a tight range on the one-hour chart. Bia to the upside currently with 2 red option expiries within the strike range. US Data may supply the impetus for a fresh breakout later on today.

– AUD/USD: AUD amounts

  • 0.6895 1.8bn

AUDUSD is overbought on the one-hour chart. Just one option expiry is in play.

– USD/CAD: USD amounts

  • 1.3650 535m

USDCAD is in a bull trend but overbought on the one-hour chart. US and Canadian data will play a role in adding volume to the pair which has seen thin trading since the end of June.

………………………………………………………………………………………………………………………..

 

As you can see on the charts, we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled in red, orange and blue.  Therefore, if you see option expiry exchange rates labelled in red these should be considered in-play, because we believe there is a greater chance of the expiry maturing at these levels based on technical analysis at the time of writing. There is still a lesser possibility of a strike if they are in orange and so these are ‘in-play’ too. However, if we have labelled them in blue, they should be considered ‘not in-play’ and therefore price action would be unlikely to reach these levels, which are often referred to as Strikes, at the time of the 10 AM New York cut.

Our technical analysis is based on exchange rates which may be several hours earlier in the day and may not reflect price action at the time of the maturities. Also, we have not factored in economic data releases or keynote speeches by policymakers, or potential market volatility leading up to the cut.

Although we have added some technical analysis, we suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage. Remember the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 AM Eastern time.

If you want to learn how forex option expiries affect price action in the spot FX market see our educational article by clicking here: https://bit.ly/2VR2Nji

DISCLAIMER: Please note that this information is for educational purposes. Also, the maturities will look more or less likely to become a strike at 10 AM NY time due to exchange rate fluctuations resulting in a different perspective with regard to technical analysis, and also due to upcoming economic data releases for the associated pairs.

Categories
Forex Daily Topic Forex Price Action

Evaluate Whether the Chart Belongs to Your Strategy or Not?

In today’s lesson, we are going to demonstrate an example of an H1 chart, where the price makes a bearish breakout and produces a bearish reversal candle upon making a bullish correction. However, things do not go as the sellers would like. Let us find out what happens and what the reason may imply.

In today’s lesson, we are going to demonstrate an example of an H1 chart, where the price makes a bearish breakout and produces a bearish reversal candle upon making a bullish correction. However, things do not go as the sellers would like. Let us find out what happens and what the reason may imply.

In today’s lesson, we are going to demonstrate an example of an H1 chart, where the price makes a bearish breakout and produces a bearish reversal candle upon making a bullish correction. However, things do not go as the sellers would like. Let us find out what happens and what the reason may imply.

The chart shows that the price produces two bearish candles consecutively. The level of support seems to be a strong one. It may produce a bullish reversal candle and push the price towards the North. However, the sellers may wait for the price to make a bearish breakout at the level of support.

Here it comes. The next candle breaches the level of support closing well below the level. This is one good-looking breakout candle. The sellers are to wait for the price to consolidate or make a bullish correction to produce a short signal.

The price makes a bullish correction. The last candle closes within the breakout level. Please pay attention to the number of candles the chart uses to make the bullish correction. The chart takes five candles to complete the correction. It means the level of support has become H4 support. Let us proceed to the next chart.

The chart produces a bearish inside bar. This is a bearish reversal candle, of course. However, the question may be raised here whether the sellers take a short entry depending on the H1 chart or not? Let us assume that a seller triggers a short entry by setting stop-loss above the breakout level.

The next candle comes out as a bearish candle. However, the last candle comes out as a bullish engulfing candle. The level is H4 support now. Thus, the buyers may look to go long in the pair and drive the price towards the North. It does not look good for the seller. The price may hit stop loss.

The next candle comes out as a strong bullish candle closing well above the breakout level. The short entry has been wiped off. If we consider the sequence bearish breakout, bullish correction, bearish reversal candle at the breakout level, it seems perfect to go short in the pair. What goes wrong here? In the Forex market, any entry may go wrong. However, over here, the H1 sellers may miss the point that the support is not H1 support anymore. It is H4 support since the level of support holds five candles. This is why the H1 traders may skip taking the short entry in this chart. It often happens in combination trading that traders forget to calculate or synchronize the chart that they are trading at. However, to be successful in trading, traders must not miss this point.

Categories
Forex Market Analysis

Daily F.X. Analysis, July 02 – Top Trade Setups In Forex – U.S. NFP Under Spotlight! 

The broad-based U.S. dollar drew offers on the day, possibly due to the modest upbeat trading sentiment backed by the hopes of further stimulus and upbeat outcome of the global PMIs. However, the losses in the greenback could be short-lived or temporary as the second wave of coronavirus continuously picking up pace in the U.S., which boosts the safe-haven demand in the market.

The broad-based U.S. dollar drew offers on the day, possibly due to the modest upbeat trading sentiment backed by the hopes of further stimulus and upbeat outcome of the global PMIs. However, the losses in the greenback could be short-lived or temporary as the second wave of coronavirus continuously picking up pace in the U.S., which boosts the safe-haven demand in the market.

The broad-based U.S. dollar drew offers on the day, possibly due to the modest upbeat trading sentiment backed by the hopes of further stimulus and upbeat outcome of the global PMIs. However, the losses in the greenback could be short-lived or temporary as the second wave of coronavirus continuously picking up pace in the U.S., which boosts the safe-haven demand in the market.

Although, the losses in the U.S. dollar turned out to be one of the key factors that kept a lid on any additional losses in the gold prices as the price of gold is inversely related to the price of the U.S. dollar. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.04% to 97.118 by 11:30 PM. Brace for U.S. NFP figures today.

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

The EUR fell below the bottom of our expected 1.1200/1.1270 area recently (low of 1.1183) ere catching back up to 1.1274. Despite the speedy bounce, the skyward drive has slightly improved. Nevertheless, EUR can bind nearer to 1.1290. For now, 1.1330 isn’t expected to challenge this level until the NFP comes out to be negative. Support is at 1.1225 followed by 1.1200

On the data front, at 11:45 GMT, the French Consumer Spending for May increased to 36.6% from the expected 30.0% and supported Euro. The French Prelim CPI for June dropped negative to -0.1% from the forecasted 0.4% and weighed on Euro, which ultimately dragged the EUR/USD pair with itself. At 14:00 GMT, the CPI Flash Estimate for the year increased to 0.3% from the expected -0.1% and supported Euro. The Core CPI Flash Estimate for the year remained flat with the projected 0.8%. The Italian Prelim CPI also remained flat with the expectations of 0.1% in June.

On the other hand, from the United States, the S&P/CS Composite-20 HPI increased to 4.0% from the expected 3.8% and supported the U.S. dollar for the year. At 18:45 GMT, the Chicago PMI dropped to 36.6 from the anticipated 45.0 and weighed on the U.S. dollar. At 19:00 GMT, the C.B. Consumer Confidence rose to 98.1 from the expected 91.6 and supported the U.S. dollar added in the downfall of EUR/USD pair on Tuesday.

The U.S. Fed chairman, Jerome Powell, provided a gloomy and unexpectedly uncertain outlook for the biggest economy of the world, which weighed on the U.S. dollar and supported the EUR/USD currency pair.

Later today, the course of the breakout will probably be determined by the U.S. payrolls release, which is anticipated to confer the economy appended 3,000K jobs in June following May’s 2509K expanding. The unemployment claims, too, are projected to grow to 7.7% in June from 7.3% in May. Meantime, Average Hourly Earnings are supposed to have grown by 5.3% year-on-year in June, indicating a strike from May’s increase of 6.7%. 

Daily Support and Resistance

  • R3 1.138
  • R2 1.1328
  • R1 1.1289

Pivot Point 1.1237

  • S1 1.1198
  • S2 1.1146
  • S3 1.1108

EUR/USD– Trading Tip

The EUR/USD is trading below a strong resistance level of 1.1285 level, closing candles below this level, and suggesting chances of selling bias until the 1.1218 level. Continuation of selling trend under 1.1280 level can extend bearish movement unto 1.1195 level today. Alternatively, a bullish breakout of the 1.1285 level can continue buying until the 1.1350 level. Mixed sentiments play as investors are waiting for the U.S. NFP and Unemployment figures, which are due later today. 

GBP/USD – Daily Analysis

During the Asian session, the GBP/USD takes stairs to 1.2485, up 0.06% on a day, while heading into the London open on Thursday. The Cable lately profited from the U.S. dollar’s lazy moves ahead of the key U.S. jobs announcement for June. Nevertheless, Brexit distress and concerns of more job declines in the U.K. have shielded the quote’s immediate bullish move.

The lack of consensus over the key Brexit concerns forced German Chancellor Angela Merkel to respond, “The European Union (E.U.) obliges to be equipped for the probability that they may not be ready to meet an alliance with the United Kingdom (U.K.).” This major news exhibits the downbeat performance of the EU-UK exit discussions in Brussels. Besides acting as the Brexit-negative sign could be the news from the U.K. Express indicating that higher than 300 EU vessels will be counted as an attack of British waters following no-deal departure.

According to Haldane, the risks of the economic outlook were considerable and two-sided. He added that the risks were more evenly balanced in June than in May and remained skewed. The views that the U.K. economy was on track for V-shaped recovery gave strength to the British Pound and pushed the GBP/USD pair on the upward track.

The strong rebound in the Pound could also be attributed to the little signs of progress on the latest post-Brexit talks. E.U. Negotiator Michel Barnier criticized Britain for choosing not to extend the deadline for the transition period that will end on Dec.31. He also said that Britain was trying to secure as many single markets as possible while showing little compromises on key sticking points, including the level playing field, security, and fisheries.

On the U.S. front, the course of the breakout will probably be determined by the U.S. payrolls release, which is anticipated to confer the economy appended 3,000K jobs in June following May’s 2509K expanding. 

Daily Support and Resistance

  • R3 1.2657
  • R2 1.2574
  • R1 1.2524

Pivot Point 1.2441

  • S1 1.239
  • S2 1.2308
  • S3 1.2257

GBP/USD– Trading Tip

The GBP/USD is trading with a bullish bias as the dollar is getting weaker ahead of the U.S. NFP figures. The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The Japanese yen saw significant outflows into overseas investments towards the end of the month but could all come back on the risks of a second wave impact on U.S. stocks. Some states in the U.S. have reversed the reopening of economies and closed their businesses on fears of a second wave of coronavirus. The U.S. Federal Reserve Chairman Jerome Powell warned on Tuesday that the second wave of coronavirus outbreak would damage consumer confidence and weaken the economy.

He was cautious that during the second outbreak, the government and people could withdraw again from the economic activity. He added that the worst part of the second wave would be the downward impact on public confidence, which could play a crucial role in getting back to economic activity.

In Republican Arizona, gyms bars, movies, and theatres and water parks were shut down for at least 30 days. These institutions were reopened in middle May, but after the rise in the infected cases across the country, the government announced to shut them down.

The health care professionals in Houston have urged residents to remain at home, wear masks, and cancel gatherings in the wake of intensified virus cases. The residents of Houston also received an emergency alert on their phones to stay home as virus infections have spiked in the town. Later today, the focus will stay on the U.S. NFP to determine further moves in the USD/JPY pair. 

Daily Support and Resistance    

  • R3 108.79
  • R2 108.48
  • R1 107.98

Pivot Point 107.67

  • S1 107.17
  • S2 106.86
  • S3 106.36

 

USD/JPY – Trading Tips

On Thursday, the USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

Categories
Forex Brokers

ECN Capital Review

ECN Capital is a product of Global Prisma Ltd. as an online foreign exchange broker that has coined that motto “Trade with the best”. The company was founded by two veteran Swiss capital market experts who followed their vision to help other traders benefit from their expertise, which comes from more than 15 years’ worth […]

ECN Capital is a product of Global Prisma Ltd. as an online foreign exchange broker that has coined that motto “Trade with the best”. The company was founded by two veteran Swiss capital market experts who followed their vision to help other traders benefit from their expertise, which comes from more than 15 years’ worth […]

ECN Capital is a product of Global Prisma Ltd. as an online foreign exchange broker that has coined that motto “Trade with the best”. The company was founded by two veteran Swiss capital market experts who followed their vision to help other traders benefit from their expertise, which comes from more than 15 years’ worth of experience in the field. More than 350,000 accounts have been opened since the website’s launch; however, traders should always conclude more thorough research before following the crowd. If you’re in the market for a forex broker, stay with us to find out all the facts about ECN Capital.

Account Types

ECN Capital offers five live account types: Silver, Gold, Platinum, MEGA, and ECN, in addition to Islamic versions of those accounts that are available upon request. The broker follows a tier-based system, where more expensive accounts offer access to better perks, like lowered trading costs, better educational resources, 24/7 customer service, signals, and free VPS.

Traders can get started with a deposit as low as $1 on the Silver account, or make a more significant deposit of $20K+ to access the better accounts. All accounts offer a leverage of up to 1:200, except for the MEGA account, which offers a higher 1:500 limit. One of the most important things to consider would be the cost of trading on each account – commission costs can be high on the Silver and ECN accounts, at $15 per lot, and spreads start from 3 pips and work their way down to 1.5 pips. Most of the accounts offer access to all of the available FX and CFD instruments, but traders should note that the Silver account does not offer agricultural commodities. Take a look at each account’s details below.

Silver Account
Minimum Deposit: $1 USD
Leverage: Up to 1:200
Minimum Trade Size: 0.01 lot
Spread: From 3 pips
Commission: $15 per lot

Gold Account
Minimum Deposit: $5,000 USD
Leverage: Up to 1:200
Minimum Trade Size: 0.1 lot
Spread: From 2 pips
Commission: $13 per lot

Platinum Account
Minimum Deposit: $20,000 USD
Leverage: Up to 1:200
Minimum Trade Size: 0.2 lots
Spread: From 1.5 pips
Commission: $9 per lot

MEGA Account
Minimum Deposit: $50,000 USD
Leverage: Up to 1:500
Minimum Trade Size: 0.5 lots
Spread: From 1.5 pips
Commission: $6 per lot

ECN Account
Minimum Deposit: $50,000 USD
Leverage: Up to 1:200
Minimum Trade Size: 0.01 – 0.2 lots
Spread: From 1.5 pips
Commission: $15 per lot

Platform

ECN Capital offers Sirix, which is a web-based platform that is focused on social trading. Offering several useful tools and charts, Sirix places more of an emphasis on social trading, which is something that the broker thinks highly of. Potential downsides would be the lack of PC and app-based downloads, but the platform can be accessed less conveniently through the mobile browser. The fact that the most popular options MetaTrader 4 and 5 are missing could be another negative for those that were hoping to see one of the more familiar options available. If you’re unsure about making the switch, or if you’ve never traded from a platform before, then we would recommend testing Sirix on a free demo account.

Leverage

Traders can use maximum leverage of up to 1:200 on all of the account types, with the exception of the MEGA account, which allows one to use a more significant option of up to 1:500. Keep in mind that one’s chosen leverage ratio will affect overall success and that beginners will likely find the lower options more suitable. Professional traders typically prefer a leverage of around 1:100, but ECN Capital has made it possible for traders to increase their chosen leverage as they progress.

Trade Sizes

Each account comes offers separate minimum trade sizes. The minimum order volume is listed below.

  • Silver Account: One micro lot (0.01)
  • Gold Account: One mini lot (0.1)
  • Platinum Account: 0.2 lots
  • MEGA Account: 0.5 lots
  • ECN Account: 0.01 – 0.2 lots

If the funds in the account fall to 50% of the total sum invested in trades, a margin call will be issued and open trades will be closed automatically. This occurs because the total amount in the trading account is not enough to cover fees and losses that may occur with currently opened trades.

Trading Costs

ECN Capital profits from spreads, which start from 1.5 pips – 3 pips, commission fees, overnight interest charges, and inactivity fees. Traders will want to consider both the spreads and commission charges associated with each account when calculating the total trading cost. Accounts follow a typical pattern, where the account that asks for the smallest deposit comes with the highest trading costs. However, the broker does deviate from this patter on their ECN account, which offers their lowest spreads, while sharing the highest commission costs that are charged on the Silver account. It may be better to avoid the ECN account for this reason by choosing the MEGA account instead, which asks for the same $50K deposit. We’ve provided an overview of each account’s standard charges below for comparison.

  • Silver Account: Spreads from 3 pips, commissions of $15 per lot
  • Gold Account: Spreads from 2 pips, commissions of $13 per lot
  • Platinum Account: Spreads from 1.5 pips, commissions of $9 per lot
  • MEGA Account: Spreads from 1.5 pips, commissions of $6 per lot
  • ECN Account: Spreads from 1.5 pips, commissions of $15 per lot

Rollovers are automatic transfers of open trades to the next business day. Traders may be charged a swap fee based on trades that are rolled over, including a 3-day charge on Wednesdays. Islamic accounts are charged a fee for holding open trades for more than 2 days. Every third night, a commission will be charged according to the current spread rate. Inactivity fees are charged on accounts that are deemed inactive after a certain period of time with no activity. The website doesn’t define the actual period of time before accounts will begin to be charged – typically, this occurs within 1-3 months with zero activity. The fee is either 5% of the account’s balance, or 25 Euro/USD, whichever is higher. Inactivity begins to be calculated from the moment that the final transaction is made.

Assets

ECN Capital allows traders to trade major and minor currency pairs, along with the Chinese Yuan, Mexican Peso, South African Rand, Brazilian Real, and South Korean Won. Silver, Gold, Copper, Bronze, Nickel, Palladium, Platinum, and Lead are offered as spot metals. Stocks are offered from the two major stock exchanges NYCE and NASDAQ, along with other stocks from outside the US, like the London stock exchange, Japan Exchange Group, and Hong Kong exchange. Commodity options include Coal, Crude Oil, and Natural Gas, alongside agricultural options like Corn, Rice, Cotton, livestock, and others. The broker also features multiple cryptocurrency options, including Bitcoin, Bitcoin Cash, Litecoin, Ripple, and Ethereum. The only asset limitation would be the exclusion of agricultural instruments on the Silver account.

Spreads

Spreads are divided into three price ranges, starting from 3 pips on the Silver account, 2 pips on the Gold account, and a shared 1.5 pips on the Platinum, MEGA, and ECN accounts. Traders will likely recognize that spreads on the broker’s more affordable accounts are less than advantageous, especially once combined with unattractive commission costs. We’ve provided a few examples below to help with spread comparison, and traders can view the entire chart under “Target Spreads” on the website.

  • EUR/USD: 3 pips on Silver, 2 pips on Gold, 1.5 pips on Platinum/MEGA/ECN
  • AUD/USD: 3.7 pips on Silver, 2.7 pips on Gold, 2 pips on Platinum/MEGA/ECN
  • USD/CAD: 3.6 pips on Silver, 2.6 pips on Gold, 1.9 pips on Platinum/MEGA/ECN
  • Gold & Silver: 65 pips on Silver, 55 pips on Gold, 40 pips on Platinum/MEGA/ECN

Minimum Deposit

Through the broker’s Silver account, traders can deposit any amount up to $5,000 USD in order to get started trading. As one of the few brokers that offer an account type with no minimum, ECN Capital is offering an attractive plus to beginners. The Gold account, which comes with spreads that are about 1 pip lower, requires a $5,000 USD deposit. From there, traders would need to make more significant deposits of $20K for a Platinum account and $50K for the MEGA and ECN account types. Accounts do come with differing minimum trade sizes, but the cost of trading is typically lowered as accounts rise in value.

Deposit Methods & Costs

Accounts can be funded by card, electronic payment methods, bank wire transfers, and online wallets. Once logged into the account, traders can make a deposit by navigating to the “Deposits” option under the “My Account” tab. Keep in mind that deposits will not be credited to the account until verification is complete and the broker would require proof of identity (POI) and proof of address (POA) documents beforehand. If you’re planning on funding by card, a photo of the front and back of the card is also required. Traders have the option to cover the card number except for the last four digits and the CVV code on the back of the card if desired. Deposits seem to be fee-free, except for possible bank charges on wire transfers.

Withdrawal Methods & Costs

Conditions state that funds must be withdrawn back to the original payment method, which is a standard practice implemented by brokers in order to prevent money laundering. Any profits will have to be withdrawn through bank wire as well. We do know that a fee of 25 to 50 USDEUR is charged on outgoing bank wire transfers, but the website isn’t clear about any fees that may be charged on other payments. This makes it a little more difficult to select the best payment method beforehand, considering that the information isn’t available for comparison.

Withdrawal Processing & Wait Time

The broker gives themselves a lengthy 7 business days to process withdrawals made through any method. This is one of the longest processing times we’ve seen before, and it can make the wait time much longer for those that would also have to wait for banks to process funds from their side.

Bonuses & Promotions

ECN Capital offers bonuses to all account holders, with bonus percentages being increased on better account status levels. Those that open a Gold account status level or higher are given the option between a predetermined bonus percentage, or a certain percentage of cashback based on incurred losses. If you do open an account that provides an option between the two choices, we would highly recommend taking the time to carefully consider which option would yield the best results, based on the amount of the deposit you’re planning to make and how successful of a trader you are. We’ve provided each account’s promotional offer below.

  • Silver Account: 30% Bonus
  • Gold Account: 40% Bonus OR 75% cashback on your losses
  • Platinum Account: 50% Bonus OR 100% cashback on your losses
  • MEGA Account: 50% Bonus OR 100% cashback on your losses
  • ECN Account: 50% Bonus OR 100% cashback on your losses

Educational & Trading Tools

ECN Capital offers different educational resources to different account holders. Each account is provided with an online financial course and 1 on 1 training, which could certainly be helpful to beginners. E-books are available to everyone except Silver account holders. Webinars and account managers are provided to accounts that cost $20K+ to open (Platinum, MEGA, ECN). VPS is also available for free for the lifetime of MEGA and ECN accounts and an economic calendar can be accessed for free on the website. While it’s disappointing that some of the options like E-books and webinars aren’t available for everyone, the broker does offer a more personalized learning experience, which is much more than many other brokers would consider having available for free.

Demo Account

ECN Capital does offer free demo accounts, which provide traders an unlimited opportunity to practice trading on the broker’s Sirix platform. One can open a demo through the trading platform if a live account has already been registered. Otherwise, it’s possible to request an account through support, since the website doesn’t offer the option to sign-up directly.

Customer Service

Customer service representatives can be contacted through LiveChat, phone, or email. At one point, the website advertises 24/7 support, 365 days a year. Elsewhere, the broker mentions that 24/7 live support is not available for Silver account holders. Traders can get in touch with an agent through the contact number +41445510256, or send an email to one of the provided email addresses:

Technical Support: [email protected]
Client Services: [email protected]

Countries Accepted

ECN Capital offers services to clients from all countries, including the United States. Their ability to do so is based on their more lenient registration in Seychelles. Those that are located in commonly restricted regions will likely feel relieved at being included with no harsh messages from support claiming that service isn’t available, which is a practice we’ve seen before by brokers that ban certain clients. The offshore registration isn’t the best quality in a broker, but traders should note that online reviews of this broker do not claim that it is a scam.

Conclusion

ECN Capital offers access to major, minor, and exotic currency pairs, plus a large variety of stocks, commodities, and cryptocurrencies. Five account types are available and the broker’s featured trading platform is the web-based, Sirix platform, which is web-based. The Silver account can be opened for any amount and minimum requirements range from $5K to $50K on the remaining live accounts. Trading costs can be high through this broker – starting spreads range from 1.5 – 3 pips and commission fees start at $6 per lot and climb to $15 per lot. A few deposit methods are offered, but long processing times and an overall lack of information about fees are frustrating.

Customer support is active 24/7 and can be reached pretty easily. Each account holder is provided with one-on-one training and an online financial course, and better offers, including VPS, webinars, E-books, and account managers are reserved for accounts that require a larger deposit. The broker also provides high bonuses or cashback rebates based on incurred losses. If you’re considering opening an account, we would recommend making the 5K deposit to open a Gold account (if possible), since Silver account holders aren’t provided with nearly as many advantages.

Categories
Forex Brokers

Direktbroker FX Broker Review

Direktbroker-FX.de is a brand operated by the Cyprus-based investment firm Leverate Financial Services Ltd. Under the leadership of veteran Forex brokers, the company describes themselves as an independent brokerage that aims to provide service to traders of all skill levels, while offering a wide variety of tradable instruments on very competitive terms. The broker’s parent […]

Direktbroker-FX.de is a brand operated by the Cyprus-based investment firm Leverate Financial Services Ltd. Under the leadership of veteran Forex brokers, the company describes themselves as an independent brokerage that aims to provide service to traders of all skill levels, while offering a wide variety of tradable instruments on very competitive terms. The broker’s parent […]

Direktbroker-FX.de is a brand operated by the Cyprus-based investment firm Leverate Financial Services Ltd. Under the leadership of veteran Forex brokers, the company describes themselves as an independent brokerage that aims to provide service to traders of all skill levels, while offering a wide variety of tradable instruments on very competitive terms. The broker’s parent company is regulated by the Cyprus securities and exchange commission (CySEC) with license number 160/11 and the Federal Financial Supervisory Authority (BaFin) for providing services to Germany. If you’re interested in opening an account, you’ll want to keep reading to find out more about the broker’s four main account types, competitive spreads, and other important facts.

Account Types

Direktbroker offers four main account types: Silver, Gold, Platinum, and Professional. In order to get started, traders will need to deposit at least 500 Euros for a Silver account, $5,000 for a Gold account, or up to $25,000 in order to open the more expensive Platinum and Profession accounts. The broker follows ESMA standards regarding leverage and sets the maximum cap at 1:30 for retail clients and 1:400 for Professional clients. Spreads are shared when trading currencies and start as low as 0 pips on all account types, but options do differ when trading indexes.

Commission fees can be broken down into charges on forex pairs and share CFDs. Commissions are one of the most important things to consider, as this is where most of the cost of trading will come from with this broker. Accounts offer access to the same tradable instruments and trade sizes, but traders should note that EAs are only allowed on Silver accounts. We’ve provided an overview of each account below.

Silver Account
Minimum Deposit: 500 Euro
Leverage: Up to 1:30
Spread: From 0 pips
Commission: 2.5 points on FX and 5.95 Euros for single stock CFDs

Gold Account
Minimum Deposit: 5,000 Euro
Leverage: Up to 1:30
Spread: From 0 pips
Commission: 1.2 points on FX and 2.95 Euros for single stock CFDs

Platinum Account
Minimum Deposit: 25,000 Euro
Leverage: Up to 1:30
Spread: From 0 pips
Commission: 1.2 points on FX and 2.95 Euros for single stock CFDs (after the first 12 months)

Professional Account
Minimum Deposit: 25,000 Euro
Leverage: Up to 1:400
Spread: From 0 pips
Commission: 1 point on FX and 2.95 Euros for single stock CFDs (after the first 12 months)

Platform

The broker offers its own web-based, mobile/tablet compatible platform alongside what is likely the world’s most popular trading platform, MetaTrader 4. MT4 can also be downloaded on mobile & tablet devices, accessed through the web, or downloaded directly on PC. Direktbroker doesn’t put any effort into describing their own platform, which is surprising. We typically see brokers going to great lengths to list features included on their secondary platforms in an attempt to compete with the more well-known MT4.

Fortunately, traders can simply opt for MT4, which we already know comes with multiple features, built-in indicators, and tools, languages, charting tools, analytical objects, and other features. The platform supports EAs (although this is only available on the Silver account) and allows traders to customize their experience on a navigable interface. With the lack of information about the Direktbroker platform, we would highly recommend choosing the timeless MT4 option, although one could certainly test the broker’s platform to see which option is more preferable from a personal standpoint.

Leverage

The company follows ESMA’s product intervention guidelines regarding leverage, which sets a 1:30 cap on FX majors, 1:20 on all other currencies, gold, and major indices, 1:10 on all other indices and commodities, and 1:5 on equities for retail clients. Under the same guidelines, professional-status clients would be able to use a more significant leverage ratio as high as 1:400. I[‘]f one considers themselves to be within the professional category, then it is possible to apply for those higher options. Note that the aforementioned limits are related to the opening of positions and that higher leverage can be used once the position has been opened. For retail clients, the maximum maintenance leverage is 1:60 and the option is double the original offer at up to 1:800 for professional status investors.

Trade Sizes

The smallest allowed trade size is one micro lot (0.01). Exact margin call and stop out levels are determined based on statistical data. The stop out level is at least 50%, while the margin call level is set at a level of at least 150%. The broker has also set a restriction on EAs by only allowing the option on Silver accounts.

Trading Costs

Costs can be broken down into commission fees, spreads, overnight interest charges, and inactivity fees. Since spreads are tight, the main cost of trading comes from applicable commission fees, which differ based on account type and the type of instrument that is being traded. We’ve provided a more detailed overview of the FX costs below for comparison.

  • Silver Account: 2.5 points per lot (half-turn)
  • Gold Account: 1.2 points per lot (half-turn)
  • Platinum Account: 1.2 points per lot (half-turn)
  • Professional Account: 1 point per lot (half-turn)

When trading share CFDs, the broker also charges a flat-rate commission fee, all of which have been provided below. Note that Platinum and Professional account holders can trade these instruments for free for the first 12 months before the listed charges apply.

  • Silver Account: 5.95 Euro
  • Gold Account: 2.95 Euro
  • Platinum Account: 2.95 Euro
  • Professional Account: 2.95 Euro

Traders will be credited or debited swaps based on the long and short swap rates of positions that are held past the daily market closing time. Swap rates are not listed on the website and the broker advises clients to view those charges from within the trading platform while remembering that triple charges occur on Wednesdays. Any account that remains inactive for 3 months will begin to be charged a monthly 15 Euro fee until trading resumes or the account’s balance is completely depleted.

Assets

Direktbroker offers a nice variety of currency pairs, including 49 total options that consist of majors, minors, and exotics, including the Mexican Peso, Turkish Lira, Danish Krone, South African Rand, and Swedish Krone. The broker also offers the spot metals Gold & Silver, in addition to Sugar, Coffee, Crude Oil, and Brent Oil. Eleven indices, 5 indexes, and 250+ share CFDs bring the total number of tradable instruments to more than 300 options. Traders would have access to a wide variety of options through this broker, however, some may be disappointed that cryptocurrencies are not available.

Spreads

While the website doesn’t provide us with a live feed, we did find a helpful chart that lists minimum and typical spreads. According to the chart, traders should expect to see the same spreads on currency pairs, regardless of the chosen account type. Below, we’ve provided a few examples of minimum and typical spreads, respectively.

  • EURUSD: 0/0.1
  • AUDUSD: 0.6/0.7
  • EURGBP: 0.5/0.7
  • EURJPY: 0.5/0.7
  • GBPUSD: 0.6/0.8
  • USD/CAD: 0.4/0.6
  • USDJPY: 0.4/0.6

Traders should notice that typical spreads are very close to the minimal option and that spreads are very tight, especially compared to the industry’s average 1.5 pips. Of course, commission charges do apply and those charges help to offset the lowered spreads. When trading indexes, spreads tend to be cut in half for Gold and Platinum account holders. For example, DAX is 1 pip on the Silver account and 0.5 pips on the Gold/Platinum accounts. Further details can be viewed under “Trading Conditions” on the website.

Minimum Deposit

The broker’s accounts are on the expensive side, starting from 500 Euros on the Silver account and 5,000 Euros on the Gold account, which equates to about $40 extra when depositing in USD on the Silver account and a $5,423 deposit requirement for the Gold account in USD (based on current conversion rates). The Platinum and Professional accounts are meant for more experienced traders and ask for a 25,000 Euro deposit as such.

Deposit Methods & Costs

Deposits can be made via bank wire transfer, Swift, E-wallet, debit/credit card, Neteller, or any other method of electronic money transfer, according to the website. The company credits incoming deposits within one business day of the time that the funds are received. There is a 1.5% fee charged on credit/debit card deposits and bank wire funds will likely incur fees on the bank’s behalf. Conversion fees would apply if depositing using any currency other than EUR, GBP, USD, and CHF.

Withdrawal Methods & Costs

Direktbroker has a policy that states withdrawals must be made through the same method that was used to deposit funds into the account. The minimum withdrawal amount is $5 USD/EUR/GBP, depending on the account’s currency. A fee of 1.5% is charged on credit/debit withdrawals and the broker charges a 15 EUR fee on bank wire withdrawals from their side, which is charged in addition to any banking fees. The remaining methods are fee-free.

Withdrawal Processing & Wait Time

The website doesn’t cover exact processing times for withdrawals. Based on contact information, we know that the finance team’s working hours are from 09:00 – 17:00 GMT+2 on weekdays, meaning that any requests made after those hours wouldn’t be processed until the following business day. E-wallets or electronic payments are typically sent and received much more quickly than more traditional methods like bank wire or even card deposits, so this would be something to keep in mind if you’re looking for funds to be credited more quickly.

Bonuses & Promotions

While the broker does offer some extra perks like free training, participation in training seminars, etc., none of the offers come in the form of bonuses, contests, or rebates. It’s always disappointing to see a lack of options in this category, although one shouldn’t always expect to see some type of promotion being offered. Keep in mind that there are usually conditions that make it difficult to withdraw funds that are earned instead of deposited, so always be sure to read the terms & conditions on any other website, especially if you’re considering a broker based on an attractive deposit bonus or other promotional offers.

Educational & Trading Tools

Direktbroker seems to understand the importance of educating clients, based on the fact that the broker offers multiple resources, including an Academy that provides a free one-day trading seminar to each client. A Trader-Camp is also available for free for Gold account holders. Traders will find an investment guide, introduction, risk-management, and top 6 mistakes to avoid sections on the website, all of which can be accessed without opening an account. Some resources are based on account status, for example, Gold account holders get 3 months’ worth of mentorship and strategy-consulting, while Platinum/Professional clients can use the service for 6 months. Trading tools are more limited, but the website does offer an expiry calculator and dividend calculator, along with various tools built-into the trading platform MetaTrader 4.

Demo Account

Traders can open a free demo account through Direktbroker by clicking on “Open Account” and then choosing “Try Free Demo”. Demo accounts come pre-loaded with 1,000,000 worth of virtual funds, which can be used to trade in an environment that simulates trading from a live account. Demo accounts are excellent educational tools that can be used for multiple purposes, like testing trading conditions, becoming more familiar with a trading platform, testing spreads, etc. These accounts are typically offered by forex brokers as an educational advantage.

Customer Service

The broker’s normal business hours occur on weekdays from 8 am to 5 pm for regular support and from 09:00 – 17:00 GMT+2 for the finance and compliance departments. During that timeframe, support is on standby to answer LiveChat, email, phone, and fax inquiries. Support seems to be extremely active on LiveChat, and we even had a real agent reach out to us with helpful information once she saw that we were on the website. Call trading is available during normal business hours via the trading desk number that has been listed below. Before calling, traders should have their account ID and password ready in order to verify their identity. Contact details have been listed below.

Email:

Support: [email protected]
Compliance: [email protected]
Finance: [email protected]

Phone:

Support: +49 30 5900 911-0
Fax: +357 25 254423
Trading Desk: +357 25 254422 (extension 512, 514, 505)

Countries Accepted

According to a statement on their website, the broker only accepts clients from a very limited number of locations – which includes Germany, Austria, Lichtenstein, Luxembourg, the Netherlands, and Switzerland. Customer support even greeted us over LiveChat once we entered the website to inform us that clients from our current location (USD) are not allowed to open accounts due to current regulation. The registration list backs up this claim by only listing the aforementioned countries. The sign-up list does have “other” as an option, but the website quickly gave us a message that clients in our jurisdiction were not allowed when we selected the option. Unfortunately, the broker’s registration policy seems to be very strict and there is no way around it.

Conclusion

Direktbroker-FX.de is a fully regulated investment firm that offers currency pairs, metals, commodities, energies, indexes, indices, and 250+ share CFDs to a rather restrictive list of countries like Germany, Switzerland, etc. The broker follows ESMA guidelines regarding leverage and sets initial caps at 1:30 for retail clients and 1:400 for professionals. Direktbroker offers tight spreads from 0 pips to all account holders, while charging commissions at varying rates. Funding an account is fairly straightforward, the broker offers a nice selection of payment options and charges low fees or none at all.

Customer support is also readily available on LiveChat, or via phone and other methods. While promotional offers aren’t available, there is a large emphasis on education and traders would be able to access seminars and benefit from mentors for 3-6 months on accounts that are of a Gold status or higher. If you’re located in one of the accepted countries, then this broker could certainly be of consideration.

Categories
Forex Brokers

KDFX Kingdom FX Review

KFDX is a brokerage located in Hong Kong that operates under the trading name of KDFX CompanySelect Limited, which is registered by the FSA in St. Vincent & the Grenadines. The company describes itself as being a top-quality service provider that places a constant effort in advancing its services. From a quick glance, traders will […]

KFDX is a brokerage located in Hong Kong that operates under the trading name of KDFX CompanySelect Limited, which is registered by the FSA in St. Vincent & the Grenadines. The company describes itself as being a top-quality service provider that places a constant effort in advancing its services. From a quick glance, traders will […]

KFDX is a brokerage located in Hong Kong that operates under the trading name of KDFX CompanySelect Limited, which is registered by the FSA in St. Vincent & the Grenadines. The company describes itself as being a top-quality service provider that places a constant effort in advancing its services. From a quick glance, traders will find several qualities that stand out about this broker; however, there is more to KDFX than meets the eye. Stay with us to find out more.

Account Types

KDFX offers three live accounts; Mini, Standard, and VIP. From a glance, we noticed some attractive features – an account can be opened for as little as $1, spreads are competitively low, and leverage options are extremely flexible. We noticed one fact about the accounts that doesn’t quite add up – both the Standard and VIP accounts advertise starting spreads from 0.3 pips, but the VIP account charges commissions, while the Standard account doesn’t. This means that it would be in the trader’s best interest to avoid the VIP account altogether. The only clear advantage associated with the account is a trading coach, who may or may not give bad advice, considering that the broker is a market maker. This might cause a conflict of interest since the broker would profit when their clients lose. Take a look at each account’s details below.

Mini Account
Minimum Deposit: $1 USD
Leverage: Up to 1:1000
Spread: From 0.6 pips
Commission: None

Standard Account
Minimum Deposit: $2,000 USD
Leverage: Up to 1:1000
Spread: From 0.3 pips
Commission: None

VIP Account
Minimum Deposit: $10,000 USD
Leverage: Up to 1:500
Spread: From 0.3 pips
Commission: $3 per lot

Platform

KDFX supports the MetaTrader 4 trading platform, which is arguably the best platform available on the market. Since 2005, MT4 has provided traders with an all-in-one experience that allows users to trade in a seamless environment with customization options and access to special features, including one-click trading, Expert Advisors, tools, and more. The website provides direct download links for PC, iOS, and Android devices, so installing MT4 shouldn’t be much of an issue. If you’re a Mac user, you might want to use the web-based version, since the platform has been known to have compatibility issues on Mac specifically. Otherwise, traders should find MT4 to be a powerful and sufficient option that works on an array of devices.

Leverage

If you’re accustomed to trading with high leverages, then we have good news for you, because KDFX actually offers exceptionally high leverage caps of up to 1:500 on their VIP account and 1:1000 on their Mini & Standard accounts. This gives traders the ability to make very large trades, providing an advantage that traders won’t find with many other brokers that offer a leverage of 1:200 or less. Speaking realistically, this is more of a benefit for more seasoned professionals that are aware of the risks. Beginners and even intermediate traders will likely do better sticking to lower leverage and work their way up, of course, KDFX will allow traders to decide when they’re ready to use those higher options.

Trade Sizes

Accounts support a minimum trade size of one micro lot (0.01) and allow for a maximum trade size of 100 lots. There are no limit restrictions surrounding the total number of trades that can be opened at one time.

Trading Costs

KDFX profits from spreads, commissions, and overnight swap fees that are charged on positions that are held past the daily market closing time. Accounts follow two separate price models; the Micro and Standard account types come with starting spreads of 0.3-0.6 pips and charge zero commissions, while the VIP account has spreads from 0.3 pips with commission charges of $3 per lot. As we mentioned earlier, this is a bit confusing, since the Standard account comes with the same spreads as the VIP account but doesn’t charge commissions. It doesn’t make sense as to why one would make a larger deposit, only to wind up paying more to place a trade than on a cheaper account. With that in mind, we would suggest choosing from a Micro or Standard account, and avoiding the VIP account if possible.

 

Assets

Although KDFX isn’t very informative about their available assets, we do know that they offer FX pairs, Gold, and CFDs for trading. What isn’t clear is just how many currency pairs are available or whether exotics and Silver are among those offers. The CFD category is also rather vague, so we don’t know if commodities, oil, and other options are available. The lack of information isn’t surprising given the website’s vague design, but a more detailed list of products would be a helpful addition.

Spreads

KDFX appears to offer very competitive spreads, starting from 0.6 pips on the Micro account and 0.3 pips on the Standard and VIP accounts. However, the website advertises starting spreads from 0 pips when one goes to create an account, so the conflicting information is a little troubling, even though it is only a slight difference. The broker advertises some of their liquidity providers and financial partners on the website; J.P. Morgan, CitiBank, Bank of America, RBS, and many others are included among that list. Working with some of these top-notch providers could make it very possible for KDFX to bring those advertised spreads to the table.

Do keep in mind that spreads are floating, and the advertised 0.3 – 0.6 pip range likely applies to the currency pair EURUSD, which typically comes with the lowest spreads. Other instruments likely come with spreads of 0.5 pips or higher.

Minimum Deposit

KDFX offers a beginner-friendly entry-level deposit minimum of just $1 on their Mini account. The account comes with competitive starting spreads and is commission-free, making it an attractive option for beginners and even experienced traders that don’t want to part with a lot of funds to start with. However, the broker’s Standard account is more expensive, with a deposit minimum of $5K and the requirement tops out at $10K on the VIP account. Those accounts offer spreads that are 0.3 pips lower, which is an advantage, but traders won’t have to feel pressured to meet those minimums.

Deposit Methods & Costs

KDFX accepts bank wire, Union Pay, and major credit cards, like Visa, MasterCard, American Express, and JCB. We’re happy to see cards included as a more convenient deposit and withdrawal option, but it would be nice to see at least some e-wallets available since many prefer those methods. The website doesn’t offer a funding page or detail any potential fees, so we can’t say for sure whether charges on placed on incoming deposits. On the bright side, one could technically make a small test deposit just to check for any potential charges before making a larger deposit. On the downside, it’s always frustrating when brokers don’t provide this information clearly. Potential fees and procedures should always be detailed clearly, even if they are not attractive.

Withdrawal Methods & Costs

KDFX likely follows standard money laundering prevention measures that would require withdrawals to be processed back to the method that was used to fund the account. Once again, the broker’s website leaves us without anything to go on when it comes to funding information, so we don’t know how high potential fees could be. If you’re withdrawing funds through bank wire, you should expect to see some type of charge from the bank’s side, typically within a $25 – $50 range.

Withdrawal Processing & Wait Time

The website briefly mentions that the company can transfer money from the trading account to the client’s bank within 1 business day, or in less than 3 hours. The “Read More” button doesn’t work, so we couldn’t find more details about any cutoff times or exactly why some withdrawals would be processed within less than 3 hours while others aren’t. Don’t be fooled by this statement however, once those funds have been sent, it will likely take a few additional working days to see them reflected in your account, especially in cases of a bank wire.

Bonuses & Promotions

The website briefly mentions a free bonus trade, which seems to be available strictly on the Mini account. The “free” portion of the trade is seemingly 30% of the value, but it’s honestly difficult to decipher the poorly translated and brief comment about this promotion. Unfortunately, there don’t seem to be any traditional offers like a deposit or welcome bonuses, trading contests, rebates, interest, etc.

Educational & Trading Tools

The KDFX website is completely absent of any helpful educational articles, videos, and other typical resources that could benefit beginners. Even the broker’s demo accounts don’t seem to work, so traders will have to look elsewhere for information and resources. We suppose that one could point out that trading tools come built-into the MT4 platform, but even MT4 doesn’t offer various calculators or an economic calendar. KDFX could benefit their clients greatly by updating their website with some type of learning center and adding some tools as well. However, this doesn’t seem to be planned for the near future.

Demo Account

Although the website does state that demo accounts are available, the link to create one takes traders to the live account login page and requires one to login with live account details. It’s possible that the account could be opened through MT4, but traders may have issues completing the process on the website. Overall, we highly doubt that traders will be able to complete the registration process, considering that there are multiple false claims on the website.

Customer Service

Support is supposedly available 24 hours a day, 7 days a week via LiveChat and email. However, there isn’t any option to start a chat on the website, so this seems to be another unsupported claim. The only contact options we found included a form on the website and the email address [email protected], so it seems that reaching a support agent isn’t as convenient as the broker would have us believe. KDFX advertises Facebook, Twitter, Pinterest, and Google accounts at the bottom of their websites, but each of the corresponding buttons doesn’t seem to be linked to any social media account.

Countries Accepted

There aren’t any restricted countries listed at the bottom of the broker’s website, which is usually a good sign. Still, traders in the US, Japan, North Korea, and several other countries are often blacklisted, so we checked the registration page to be sure. KDFX doesn’t even require one to input their country of residence when applying for an account, so it seems safe to say that everyone is welcome here.

Conclusion

Initially, our impression was that KDFX seemed to be a solid investment choice that even caters to beginners on their Mini account while providing low starting spreads from 0.3 to 0.6 pips and high leverages up to 1:1000. Then, we started noticing that the website makes various unsupported statements. For example, the website states that spreads start from 0 pips and that LiveChat and demo accounts are available, but these facts don’t seem to be true. It’s also difficult to get in touch with support and agents can only be contacted through email.

Other facts don’t make complete sense – why would the VIP offer the same spreads as the Standard account, plus add commissions when the cheaper account doesn’t? To top things off, funding information is slim to none and educational resources are nonexistent. Don’t take this the wrong way – KDFX does offer some clear benefits, and it’s possible that one could turn a nice profit under their trading conditions. You’ll just have to decide if the other areas where the broker falls short make it worth opening an account.

Categories
Forex Brokers

Hantec Markets Review

Hantec Markets is an online foreign exchange broker that operates under the trading name of Hantec Capital Group Holdings Ltd, with the parent company being regulated in the UK, Australia, Japan, New Zealand, Mauritius, Jordan, and Hong Kong by the FCA, the Financial Services Commission Authority of Mauritius, and the Jordan Securities Commission. The group […]

Hantec Markets is an online foreign exchange broker that operates under the trading name of Hantec Capital Group Holdings Ltd, with the parent company being regulated in the UK, Australia, Japan, New Zealand, Mauritius, Jordan, and Hong Kong by the FCA, the Financial Services Commission Authority of Mauritius, and the Jordan Securities Commission. The group […]

Hantec Markets is an online foreign exchange broker that operates under the trading name of Hantec Capital Group Holdings Ltd, with the parent company being regulated in the UK, Australia, Japan, New Zealand, Mauritius, Jordan, and Hong Kong by the FCA, the Financial Services Commission Authority of Mauritius, and the Jordan Securities Commission.

The group of companies responsible for Hantec Markets has actually been in business since 1990, which is a significant amount of time to stay afloat in such a competitive marketplace. The company offers some ideal conditions and provides high leveraged trading opportunities on FX and CFD options. If you’re interested in this company, you’ll want to read our detailed review to find out everything else you’ll need to know.

Account Types

Hantec Markets offers one primary live account type. Without the ability to choose from several more personalized accounts, traders may find options limited or worry that the price model won’t be suitable for everyone. Fortunately, the broker offers its live account with no minimum deposit and tight starting spreads from 0.2 pips on EURUSD. From a glance, the account seems versatile enough that it could actually satisfy a range of traders. Take a look at the account’s conditions below.

  • Minimum Deposit: None
  • Leverage: Up to 1:500
  • Spread: From 0.2 pips
  • Commission: On some CFDs

A personal account manager and the ability to trade micro-lots are among some of the account’s other featured highlights. Stay with us to find out more need to know information about the account’s leverage, tradable instruments, and other facts.

Platform

Traders won’t have to worry about having access to a sturdy platform when trading through Hantec Markets, as the broker offers the highly praised MetaTrader 4 platform for download on PC, Mac, and mobile devices or tablets. Those that have Mac computers will find the direct download option a perk after having issues with downloading the program in the past, and this is something that isn’t often available due to compatibility issues.

In a nutshell, the platform provides a powerful experience, where traders can execute trades quickly with one-click without worrying about the reliability of their platform. MT4 offers multiple technical indicators, 4 pending order types, 9 timeframes, analytical objects, and more. We could spend all day throwing out facts, but if you’ve never traded from MT4 before, we recommend opening a free demo account so that you can see for yourself why you’ll never need another platform again.

Leverage

Hantec Capital offers an impressive 1:500 leverage as their maximum offer, however, one’s trading activity must be reviewed for suitability before the broker will allow one to apply leverage higher than 1:300. Still, this is less restrictive than most offers and some regulators even limit leverage options to around 1:30. Do keep in mind that using higher leverage is risky business, and it isn’t advised until one is financially stable and completely confident in their abilities.

Trade Sizes

The minimum supported trade size is one micro lot (0.01), or one unit of base currency on most instruments, aside from some indices. Maximum trade sizes differ based on the instrument in question. Currency pairs allow for a maximum lot size of 50, and other maximums are listed at 20 lots on metals, 200 lots on indices, and 500 lots on oil products. Stop out occurs as 40% of the used margin level.

Trading Costs

The broker primarily profits from spreads and commissions. The company charges a small fee on top of the market spread and charges commissions for trading some CFDs, which generates their primary source of revenue. These charges are applied along with overnight interest charges known as swaps. Hantec Markets is very transparent about their current swap rates and lists them on the website under “Trading Conditions”. Bear in mind that rates are tripled on Wednesdays.

Assets

The following assets are available for trading:

  • 40+ currency pairs, including majors, minors, and exotics
  • Gold (XAU) & Silver (XAG)
  • 9 indices
  • Commodities including US and UK Oil

Hantec markets are offering a pretty diverse number of currency pairs, along with the most commonly offered metals and indices. Commodities are more limited; we don’t see any agricultural options or even Crude Oil or Natural gas. The company also fails to provide stocks and cryptocurrencies for trading, but whether that is a downside comes down to one’s personal trading preference.

Spreads

Spreads start out at an extremely competitive 0.2 pips on the benchmark EURUSD pair. This is exceptionally low considering that the account can be opened for $1, where many others ask for a large deposit to access even mediocre spreads. Of course, this pair usually shows the tightest spreads, so options do climb to 0.5 pips and up to 2 pips on some of the other pairs. Still, the spreads offered by this broker are low, and traders will have a difficult time finding a more competitive offer for the price. Take a look at a few examples below.

Minimum Deposit

This brokerage offers traders the advantage of opening an account without any specified deposit requirements. Of course, traders would want to deposit enough to sufficiently trade, but this makes it possible to make a small test deposit, start off with an extremely small investment if you’re unsure of your abilities, and etc. Elsewhere, costs can add up quickly, where many others ask for $500 or more just to open a simple Micro/Mini/Cent model account.

Deposit Methods & Costs

Accounts can be funded with Visa, Maestro, and UK debit cards, Skrill, Neteller, bank wire transfer, and Union Pay in USD, EUR, GBP, or NGN. There is a $25 minimum funding limit on card deposits and a $100 first-time deposit requirement is applicable when funding through Skrill and Neteller. There are zero fees charged on deposits from the broker’s side but it is possible that fees may be charged from the bank’s side in the case of wire transfer.

Withdrawal Methods & Costs

The broker’s withdrawal policy states that withdrawals will be processed back to the same method that was used to fund the account. Profits are typically withdrawn through bank wire. Note that the broker does not accept requests to withdraw funds to a third party, funds can only be sent to an account that matches the account holder’s name on the trading account. Fees are not mentioned or listed on the website. As usual, traders will likely see charges on withdrawals made through bank wire. Those charges can vary based on the bank in question, so it may be worth reaching out to your personal bank to ask about any potential charges.

Withdrawal Processing & Wait Time

Requests received before 15:00 GMT will be processed on that same day, while requests received after the cutoff time will have to wait until the following business day to be processed. Once funds have been sent, it can take 2-5 working days to see the amount reflected in one’s account. Overall, the processing time is relatively quick and convenient.

Bonuses & Promotions

While most of the facts surrounding the company have been ideal thus far, we are disappointed to report that this broker doesn’t offer any special promotional opportunities. Everybody loves the chance to earn extra cash, through bonuses, rebates, contests, and etc., but this is something that one shouldn’t let determine whether they will be trading with a broker or not. Think of these things as extra perks, not a mandatory quality that brokers must have.

Educational & Trading Tools

The broker’s website spends a lot of time covering trading basics and teaching about the risks and rewards of trading. The site also provides data on macroeconomics and the strategy and planning that one would need to consider when it planning out their own personal strategy. In addition, traders will find resources sorted by skill level, a financial glossary, and the ability to register for webinars. Trading tools are based on market analysis. Check out some of those options below:

-Market Reports
-Analysis Videos
-Economic & Holiday Calendars

Overall, the website’s educational portfolio is superior to many other offers we found. Traders can really benefit from having the information available at their fingertips, and having educational resources available directly on your broker’s website can promote learning and provide other benefits.

Demo Account

Along with many others, Hantec Markets provides free demo accounts to everyone that would like to use one. These simulation accounts allow traders to practice trading in a variety of ways with zero financial risk. If you’re on the fence about opening a live account because you’ve never traded before, then these accounts can help to make the decision as to whether you’re prepared to open a live account, or if you’ll need some more practice. And don’t let the registration process dissuade you – a demo account can be opened quickly by following these steps:

-Click on “Open Demo”, located on the top right corner of the website
-Fill in the necessary details – name, email, phone, and country
-Click the “Open a free demo” button and get started trading!

Note that each account lasts for 30 days, under the pretense that the company likely expects potential clients to move on to a live account within that timeframe. However, one could simply open another free demo account if the timing isn’t right, or reach out to support to request an extension.

Customer Service

Traders can reach out to a customer support agent at any hour on weekdays by starting an instant chat, sending an email through the form on the website’s contact page, or reaching out to one of the company’s listed phone numbers. Starting the chat process is fairly quick, the chat window will ask for a name and email address, before asking traders to select their country from the options Africa, China, South Asia, South America, Thailand, and the UK & Europe. Support isn’t always online at each location, at the time we checked, support was active in China and the UK. Hantec prides itself on the fact that they connect users to one department for all of their inquiries and even technical problems, instead of bouncing one around like many other brokers have been known to do.

Countries Accepted

Being that Hantec Markets is a regulated London-based brokerage, it isn’t exactly surprising to find that a few countries have found themselves on the broker’s blacklist. If you’re located in the USA, Iran, or North Korea, then you won’t be able to open an account or trade through this company.

Conclusion

Hantec Markets offers a straightforward approach to trading on the forex market. From one live account, traders can trade more than 40 currency pairs and CFDs with leverage of 1:300 or higher, with benefits in the form of low starting spreads from 0.2 pips, no minimum entry deposit, a personal account manager, and a number of educational resources at their fingertips. Potential downsides include a lack of promotional opportunities and withdrawal fees are not outlined clearly. Our final opinion is that Hantec Markets is a trustworthy option that offers some great advantages, making the company worthy of a place on anyone’s list of considerable brokerages.

Categories
Forex Brokers

Esplanade Market Solutions Review

Esplanade Market Solutions features four different live accounts: FIX, Standard, ECN, and VIP. The FIX account offers instant execution, while the other accounts are under market execution. The FIX account is also designed to offer fixed spreads that start from 3 pips, while the Standard account offers floating spreads that start from a slightly below average 1.2 pips. Both of those accounts are commission-free.

Esplanade Market Solutions features four different live accounts: FIX, Standard, ECN, and VIP. The FIX account offers instant execution, while the other accounts are under market execution. The FIX account is also designed to offer fixed spreads that start from 3 pips, while the Standard account offers floating spreads that start from a slightly below average 1.2 pips. Both of those accounts are commission-free.

Esplanade Market Solutions features four different live accounts: FIX, Standard, ECN, and VIP. The FIX account offers instant execution, while the other accounts are under market execution. The FIX account is also designed to offer fixed spreads that start from 3 pips, while the Standard account offers floating spreads that start from a slightly below average 1.2 pips. Both of those accounts are commission-free.

Account Types

The ECN and VIP accounts offer different pricing, with lower starting spreads from 0 pips in exchange for commission costs, which are $ 3 lower (round turn) for VIP members. Surprisingly, the broker offers their first three accounts for the same entry-level $250 deposit. All of the live accounts share the same trade sizes, with differences in the margin call and stop out levels (the Standard account shares levels with the FIX account, while the ECN account shares conditions with the VIP account).

Accounts also offer a personal account manager for deposits of $10K or more. Traders will find the most flexible leverage options on the FIX, Standard, and ECN accounts. VIP account holders are excluded from participating in promotional offers, although there were none available at the time this review was written. We’ve provided an overview of each account type below for convenience.

FIX Account
Minimum Deposit: $250 USD
Leverage: Up to 1:1000
Spread: Fixed from 3 pips
Commission: None

Standard Account
Minimum Deposit: $250 USD
Leverage: Up to 1:1000
Spread: Floating from 1.2 pips
Commission: None

ECN Account
Minimum Deposit: $250 USD
Leverage: Up to 1:500
Spread: Floating from 0 pips
Commission: $4 per side

VIP Account
Minimum Deposit: $20,000 USD
Leverage: Up to 1:100
Spread: Floating from 0 pips
Commission: $2.50 per side

Platform

EMS exclusively features the award-winning MetaTrader 4 platform, which is available for direct download on PC/MAC, through mobile trading on iPhone/iPad/Android devices, or through the web-browser version. MT4 is one of the most popular trading platforms on the market, due in part to its ease of use, high performance, reliability, and rich functionality. The platform also provides an opportunity to develop and use Expert Advisors and provides financial news and technical analysis data. All of these features combined with customization options and extreme reliability make MetaTrader 4 the best option that a forex broker could have available.

Leverage

Leverage caps range from an average of 1:100 on the VIP account to significant offers of 1:500 on the ECN account and 1:1000 on the FIX and Standard accounts. While the VIP account’s leverage is more limited based on the size of the account’s initial deposit, the broker’s remaining accounts offer options that are much higher than many competitor’s offers. However, upon opening an account, traders should note that the default leverage will be set to 1:100. In order to change the leverage to a higher option, one would need to contact a manager by phone or email ([email protected]) to request the change. The website doesn’t state that there would be any conditions, but it is possible that the broker may implement policies of rejecting the desired leverage amount if they do not believe the trader is of a high enough skill level.

Trade Sizes

All accounts share a 0.01 (one micro lot) minimum trade size and a 100-lot maximum trade size. Accounts also support an unlimited number of maximum orders. The FIX account shares the same margin call and stop out level with the Standard account, while the ECN account shares the same limits with the VIP account. Note that reaching the margin call level would restrict one from placing any new trades and that would be an ideal time to deposit more funds or consider closing certain positions. Reaching the stop out level would result in the system automatically closing out unprofitable trades. Those levels have been listed below.

  • Margin Call/Stop Out
  • FIX/Standard Account: 75%/1%
  • ECN/VIP Account: 100%/40%

Trading Costs

EMS collects profits from spreads, commissions, and overnight interest charges. The broker features two price models, the first of which being where traders trade under higher spread conditions without paying any commission charges, which is applicable on the Standard & FIX accounts. The ECN and VIP accounts fall under the second category, where traders see low staring spreads from 0 pips in exchange for paying commission charges. The ECN account charges commissions at a rate of $4 per side, or $8 round turn, while the VIP account offers lowered commissions of $2.50 per side/$5 round turn, making it $3 cheaper to place a trade from the broker’s best account.

Overnight interest charges, otherwise known as swaps, are also applicable unless one is trading from an Islamic account. Swap charges are credited or debited to the account based on current rates when positions are held past the daily market closing time. On Wednesdays, the swap rates are tripled. Traders can view the current rates within the MT4 platform and more information about the broker’s swap policy can be found under their terms & conditions.

Assets

EMS features an asset portfolio that is made up of FX pairs, metals, 22 index CFDs, oil, share CFDs, and Russian shares. Traders will have access to 35 currency pairs, including majors & minors, plus exotic options like the Swedish Krona and the Mexican Peso. A few familiar exotics are missing, which takes away from the overall number of FX pairs. Available metals include the most common options Gold, Silver, plus one additional option, Platinum. Oil options consist of Crude Oil, Natural Gas, and US Oil.

There are more than 60 shares available in popular American companies like Google, Apple, Ford, and many other options. The addition of 35 Russian shares brings the total number of investible shares to nearly 100 options. We’re missing the option to trade additional commodities, cryptocurrencies, and a few other options, but EMS does manage to bring traders a rather diverse range of instruments to choose from.

Spreads

EMS allows traders to choose from fixed, variable, or ECN type spreads. The fixed spread is typically maintained at a certain level, although high market volatility may cause those spreads to fluctuate. Options start from a rate of 3 pips on the FIX account on the benchmark EURUSD pair. The website doesn’t offer us further details, so it isn’t clear just how much higher those spreads are set on minors and exotics. Variable spreads can fluctuate more widely, but they do come with a lower minimum level. Variable spreads are offered from 0 pips on the ECN and VIP accounts, or from 1.2 pips (0.3 pips below average) on the Standard account. Judging by the advertised amounts, it seems as though the company is offering competitive spreads on all three of the variable-based account types.

Minimum Deposit

The broker sets its entry-level deposit at a rather expensive $250 USD. This amount was once considered an average investment amount, but many brokers offer at least one account type for $100 or less, and some have done away with deposit requirements altogether. On the plus side, this amount grants access to the FIX, Standard, and ECN account types. As long as one can afford the deposit, then they would have the ability to choose from three different accounts that offer different pricing models. Elsewhere, this amount likely wouldn’t be enough for an ECN account.

Note that EMS also offers a VIP account, which asks for a $20,000 USD deposit. This account was designed for more professional high-volume traders and comes with commission costs that are $1.50 lower per side or $3 lower round turn. Traders that make a deposit of $10K or more will have access to a personal account manager. This perk is guaranteed to VIP account holders.

Deposit Methods & Costs

Available funding methods include Visa/MasterCard/Maestro, MNP, IKS Megafon, MTC, QIWI, Fasapay, iPay, Skrill, Neteller, AdvCash, Perfect Money, and Beeline. Note that some restrictions apply that would prevent residents of certain countries from using specific funding methods, with Russian clients primarily being among those that would have fewer options. Several deposit options also limit the maximum transaction to around $1,000 USD or less. Others, like Beeline, limit the maximum transaction amount to $70.

Commissions are charged on most of the deposit methods, although the exact percentage of the charge sometimes depends on more technical aspects of the payment provider. Traders would be able to view the restricted countries for each method, deposit minimum/maximum, and exact fee charges on the “Deposits/Withdrawals” page of the website. We’ve provided an overview of the commission charges below.

  • FasaPay: 0%
  • iPay: 2% + $0.50 USD
  • AdvCash: 3%
  • PerfectMoney: 3%
  • Skrill: 3.9% + $0.37 USD
  • Visa/MasterCard: 4% – 6.5%
  • Neteller: 4.9% + $0.29 USD
  • Maestro: 6.5%
  • MNP: 4% – 6.5%
  • Megafon: 7.5%
  • Beeline: 7.5%
  • MTC: 7.5%
  • QIWI: 8 – 8.5%

Withdrawal Methods & Costs

All of the available deposit methods can be used for withdrawals, under the condition that withdrawals would be processed back to the original payment source. The commission charges on withdrawals are typically lower than those on deposits, but the charges still manage to be extremely expensive. For example, making a deposit and withdrawal through Neteller would result in a total commission charge of nearly 10% of the funded amount, while doing so through Skrill would claim an outrageous 14% of the trader’s total funded amount. Choosing one of the higher methods could significantly reduce profits or even eliminate them altogether, so it is important to consider which payment provider to use carefully. Withdrawal fees have been listed below in order from the least to most expensive.

  • FasaPay: 0%
  • Perfect Money: 1%
  • Beeline: 2%
  • Megafon: 2%
  • MTC: 2%
  • iPay: 2% + 0.50 USD
  • QIWI: 2.5%
  • AdvCash: 3%
  • MasterCard/Visa: 3% + 7.50 USD or 3% or 4.5% + 2.60 USD or 3% + 1.25 USD
  • MNP: 3% or 3% + 7.50 USD or 4.5% + 1.25 USD or 3% + 1.25 USD
  • Neteller: 4.5% + 0.29 USD
  • Maestro: 3% + 1 USD – 4.5% + 2.60 USD
  • Skrill: 10%

Withdrawal Processing & Wait Time

It takes 3-5 days for funds to be received after the broker has finished processing the withdrawal request. The website doesn’t list the actual processing times, so traders should add at least one or two business days onto the anticipated wait time. The financial department is likely in the office on weekdays, but we don’t have any information about their exact working hours. If a request is sent after those hours, then another business day would be added to the wait time.

Bonuses & Promotions

EMS doesn’t currently offer any bonuses, contests, rebates, or other promotional opportunities for retail clients. The company does have a “Multilevel” partnership program, which would reward partners with different levels of partnership rewards when referred clients place trades under different spread conditions. It would be nice to see some additional offers added, especially considering how helpful deposit bonuses can be for beginners or those that don’t have a lot of funds to start with. Hopefully, the broker will consider adding retail offers in the near future. Traders should note that VIP account holders would not be able to participate in any type of bonus opportunity if one becomes available.

Educational & Trading Tools

The EMS website does have a few tools available in the form of company and market news, an economic calendar, a profit calculator, and a technical summary. Unfortunately, we can’t say the same for educational resources. Aside from demo accounts, the broker just doesn’t offer anything of educational value to their potential or existing clients. It’s always possible to find resources elsewhere on the web, but there is an added convenience in having educational videos, e-books, articles, and other mediums available directly through one’s broker. This can also promote learning and help traders to become more educated before making a deposit and potentially losing money because of a lack of knowledge.

Demo Account

Along with the majority of other forex brokers, EMS recognizes the benefits of trading from a practice account and therefore offers the ability to open a risk-free demo account to any trader that would like to do so. Demo accounts allow traders to accumulate practical trading skills and to get acquainted with all specific features of the software without risking real money.

When registering an account, traders will be able to select an initial deposit amount in virtual currency. The amount can be based on one’s ideal real account deposit amount for a more realistic experience, or one could request an extremely large amount of virtual funds to play with. If one isn’t yet familiar with the broker’s supported trading platform, MetaTrader 4, then it would also be possible to open a demo account in order to efficiently practice using the platform.

Customer Service

Support can be contacted via LiveChat, email, or phone. It is possible to reach an agent through the direct phone line with any questions during weekday hours from 9:00 – 18:00. As for LiveChat, we would have assumed that agents would be active during those hours as well, but support was offline when we attempted to start a chat. It’s possible to leave a message for email through the chat window, but traders will find that the primary chat language is in Russian, so this may be a potential downside.

Hopefully, our readers won’t find themselves stuck with the “out operations are currently busy” message like we did if they find the need to contact an agent quickly. Of course, the phone is usually a quick back up method, but traders in today’s world primarily prefer the ultimate time-saving convenience of LiveChat. This is why it’s so disappointing when we see brokers promoting this feature while failing to provide enough agents to manage it. All contact details have been listed below.

Phone: +357 25 654-100
Email: [email protected]

Countries Accepted

Esplanade is not very clear with regards to countries that are barred from using their platform. Instead, they take a more generic stance, stating that those who reside in countries where Forex is not allowed should not register for an account. Their website states the following, “This site is not intended for distribution, or use by, any person in any country where such distribution or use would be contrary to local law or regulation. None of the services or investments referred to in this website are available to persons residing in any country where the provision of such services or investments would be contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of and comply with any local law or regulation to which they are subject.”

Conclusion

Esplanade Market Solutions, or EMS, offers leveraged trading as high as 1:1000 on 35 FX pairs, plus metals, index CFDs, oil, Share CFDs, and Russian Shares from the MetaTrader 4 platform. Accounts offer two different pricing models; zero commissions on the FIX and Standard account with fixed spreads at 3 pips or variable spreads from 1.2 pips, or low starting spreads from 0 pips on the ECN and VIP account with applicable commission costs that are $3 lower on the more expensive VIP account. The remaining accounts allow for an initial deposit of $250, which is somewhat expensive, but the amount does make it possible for traders to choose the account they’d prefer with a realistic entry amount.

Although some of the conditions are advantageous, the broker’s funding fees would likely eat into profits significantly. Commissions are charged on almost every deposit method at rates that climb up to 8% on some methods and there are fees charged on deposits as well. For example, funding through Skrill would claim an insane 14% of the client’s total funded amount by the time one received their withdrawal. Support is available through LiveChat, phone, or email. Phone service is offered from 9:00 to 18:00, but LiveChat support is not always available during those hours. Currently, the only promotional offer is limited to referrals by partners.

The website does host some trading tools like news and calculators, but demo accounts are the only offer education-wise. If you’re interested in opening an account, you’ll find several advantages through EMS. Our best advice would be to carefully consider which payment method to use, otherwise, there wouldn’t be any significant reasons to stop one from choosing this broker.

Categories
Forex Signals Forex Videos

Free Forex Signals App! – Forex Academy’s FA Signals App Now Available For Android & IOS

https://youtu.be/bHdkd101dHw

https://youtu.be/bHdkd101dHw

Welcome to our Forex Academy Signals app!

 

It is a pleasure to announce the FA signals app! Available in iOS and Android, the FA Signals app is a terrific complement to our Forex Academy Signals service, that started on March 20 and which has currently accumulated a total of 3,319 pips and 68.53% winning accuracy.

The FA Signals app will allow our users to get timely signal notifications for them to profit from our pro approach to trading. In this article, we will explain the symbols and working of the app so that you can benefit from it.

The app was devised as a notification tool; therefore, it is quite simple. But we wanted to pack as much information as possible in it, so we created specific icons to compress the information and make it available at a glance.

In the figure below, we can see the main layout of the FA Signals app. We can see a series of icons on the left column that explain the type and direction of the trades. The top of the app shows the legend:

Spot Buy: Buy at the current price
Spot Sell: Sell at the current price
Pending BL: Pending order, Buy Limit
Pending SL: Pending order, Sell Limit
Pending BS: Pending order, Buy Stop
Pending SS: Pending order, Sell Stop

We see also that the app has two tabs: Primary Info and More Info. In the primary Info tab, we have packed the needed information to make the trade:

Assets: The Forex Pair that is the subject of the trade
Entry: Entry price. This value can be the spot price at which the entry has been taken, or, in Pending orders, the limit or stop level at which the order should be placed.
Stop: The stop-loss level
Target: The Take-profit level
Pips: the current pip count of the live and closed trades. In a green rectangle, the pips are gains, in a red one, losses.

The More info tab shows the following information:
Assets: The Forex Pair that is the subject of the trade
Exit Price: The price at which the trade was closed or blank in the case of live signals
Exit Date: The date and time of the close
Method: This is a link to our article explaining the trade setup. We recommend our traders to look at the articles because not only is it a practical lesson on trading, but we also give detailed information on the risk and reward figures of every trade. Position size is critical to succeeding in the Forex markets; thus, it is an integral part of our trade reports.

R/R: The reward/risk ratio of the trade.

Finally, at the top of the page, we present our current total stats: Pips:3,319.99, the pip balance of our trades since the beginning. Gainers: 69.53% the percent gainers since the beginning.

How does this work?

You will receive notifications on new signals, modifications of a live signal, and the close of the signal. The closing will occur by reaching the target, by manual closing, or if the price hits the stop loss. If you follow the instructions, you would have set the stop and target levels at the beginning of the trade; thus, you need only to take care of the modifications and manual closing of a signal.
When you receive a notification and click on it, the app will open and show the referred signal highlighted, so it is more easily identified. By touching the highlighted signal, you acknowledge the notification and will be de-highlighted. Therefore, we recommend that you do that after doing your mods.

We wish you successful trading, helped by our integral signal service. But, please take this as an opportunity to learn and be self-sufficient. Our philosophy is not to give signals, but to help you achieve your own by learning through practical examples, which are supported by our vast educational resources.

Categories
Forex Signals

Daily F.X. Analysis, July 01 – Top Trade Setups In Forex – ADP Non-farm In Highlights! 

On the news front, the primary focus will stay on the ADP non-farm payroll figures, which are expected to be positive. If the actual data also comes out positive, we are going to see sharp selling in gold. Conversely, the negative data can drive selling the dollar and buying in gold.

On the news front, the primary focus will stay on the ADP non-farm payroll figures, which are expected to be positive. If the actual data also comes out positive, we are going to see sharp selling in gold. Conversely, the negative data can drive selling the dollar and buying in gold.

On the news front, the primary focus will stay on the ADP non-farm payroll figures, which are expected to be positive. If the actual data also comes out positive, we are going to see sharp selling in gold. Conversely, the negative data can drive selling the dollar and buying in gold.

Economic Events to Watch Today 

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.12333 after placing a high of 1.12616 and a low of 1.11908. Overall the movement of the EUR/USD pair remained flat but slightly bearish throughout the day. The pair EUR/USD moved in sideways during Tuesday’s trading session and ended the day with some losses. The greenback was strong throughout the day ahead of Fed chair Jerome Powell’s speech and weighed on EUR/USD pair. However, after the speech, the U.S. dollar became weak, and the EUR/USD pair recovered some of its daily losses.

On the data front, at 11:45 GMT, the French Consumer Spending for the month of May increased to 36.6% from the expected 30.0% and supported Euro. The French Prelim CPI for the month of June dropped negative to -0.1% from the forecasted 0.4% and weighed on Euro, which ultimately dragged the EUR/USD pair with itself.

At 14:00 GMT, the CPI Flash Estimate for the year increased to 0.3% from the expected -0.1% and supported Euro. The Core CPI Flash Estimate for the year remained flat with the projected 0.8%. The Italian Prelim CPI also remained flat with the expectations of 0.1% in June.

On the other hand, from the United States, the S&P/CS Composite-20 HPI increased to 4.0% from the expected 3.8% and supported the U.S. dollar for the year. At 18:45 GMT, the Chicago PMI dropped to 36.6 from the anticipated 45.0 and weighed on the U.S. dollar. At 19:00 GMT, the C.B. Consumer Confidence rose to 98.1 from the expected 91.6 and supported the U.S. dollar added in the downfall of EUR/USD pair on Tuesday.

The U.S. Fed chairman, Jerome Powell, provided a gloomy and unexpectedly uncertain outlook for the biggest economy of the world, which weighed on the U.S. dollar and supported the EUR/USD currency pair.

The increased number of infected cases from many states of the U.S. raised alarming bells, and some states again started to shut down economic activity. The second outbreak forced people to stay in their homes once again and keep them away from the labor market after hurting their confidence level. According to Powell, full consumer confidence was vital to full economic recovery. Euro investors will be looking forward to the release of Germany’s Unemployment Rate figures for June on Wednesday for fresh impetus.

Daily Support and Resistance

  • R3 1.1241
  • R2 1.1235
  • R1 1.1229

Pivot Point 1.1223

  • S1 1.1217
  • S2 1.1211
  • S3 1.1205

EUR/USD– Trading Tip

The EUR/USD is trading below a strong resistance level of 1.1245 level, closing candles below this level, and suggesting chances of selling bias until the 1.1218 level. Continuation of selling trend under 1.1218 level can extend selling unto 1.1195 level today. Alternatively, a bullish breakout of the 1.1245 level can continue buying until 1.1289. Mixed sentiments play as investors are waiting for the U.S. ADP figures, which are due later today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.24002 after placing a high of 1.24016 and a low of 1.22574. Overall the movement of GBP/USD pair remained bullish throughout the day. The Pound raised against the dollar after clawing back early day losses on Tuesday amid the suggestion by Bank of England that the U.K. was on track for a stronger than expected rebound after the worst slump in more than 40 years in the first quarter of 2020.

At 11:00 GMT, the Current Account Balance from the United Kingdom showed a deficit of 21.1B against the expected deficit by 15.2B and weighed on British Pound. The Final GDP for the first quarter dropped to -2.2% against the forecasted -2.0% and weighed on British Pound. The Revised Business Investment for the quarter also came in as -0.3% from the 0.1% and weighed on British Pound.

In an earlier trading session on Tuesday, GBP/USD remained under pressure due to poor than expected data from Britain’s side. However, after the positive comments from the chief economist from the Bank of England, the pair GBP/USD gained traction.        

On Tuesday, Andy Haldane said that recent signs suggested that Britain was on course for V-shaped economic recovery from the coronavirus-induced lockdowns, but there was still a risk of high & persistent unemployment.    

According to Haldane, the risks of the economic outlook were considerable and two-sided. He added that the risks were more evenly balanced in June than in May and remained skewed.  

The views that the U.K. economy was on track for V-shaped recovery gave strength to the British Pound on Tuesday and pushed the GBP/USD pair on the upward track.

The strong rebound in the Pound could also be attributed to the little signs of progress on the latest post-Brexit talks. E.U. Negotiator Michel Barnier criticized Britain for choosing not to extend the deadline for the transition period that will end on Dec.31. He also said that Britain was trying to secure as many single markets as possible while showing little compromises on key sticking points, including the level playing field, security, and fisheries.

On the U.S. front, the dollar was weak across the board after the speech of Federal Reserve Chairman Jerome Powell, who provided an uncertain and gloomy outlook for the U.S. economy due to an increased number of infected cases in the U.S. that had forced the renewed lockdown measures in some states. The weak U.S. Dollar added in the gains of the GBP/USD currency pair on Tuesday.

Daily Support and Resistance

  • R3 1.2381
  • R2 1.2367
  • R1 1.2354

Pivot Point 1.234

  • S1 1.2327
  • S2 1.2313
  • S3 1.23

GBP/USD– Trading Tip

On Wednesday, the GBP/USD is trading with a bearish bias as the dollar is getting strong, perhaps due to the positive forecast of ADP figures. The GBP/USD is trading at 1.2375 level, and it’s finding immediate support at 1.2358 level. Closing of candles below 1.2404 level can open further room for selling until 38.2% Fibo level of 1.2340 level. But the bullish breakout of 1.2400 level can drive buying in Cable and can lead its prices towards the next target level of 1.2504 level. The RSI and MACD show diverse opinions as the MACD is in a selling zone, while the RSI is in a buying zone. Let’s consider taking a selling trades below 1.2400 level and buying above the same. 

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.925 after placing a high of107.982 and a low of 107.519. At 4:30 GMT, the Unemployment Rate from Japan increased to 2.9% against the forecasted 2.8% in May and weighed on Japanese Yen that pushed USD/JPY pair higher. At 4:50 GMT, the Prelim Industrial Production was dropped by 8.4% in May against the expected drop of 5.6%, it weighed on Yen and supported USD/JPY pair.

The Japanese yen saw significant outflows into overseas investments towards the end of the month but could all come back on the risks of a second wave impact on U.S. stocks. Some states in the U.S. have reversed the reopening of economies and closed their businesses in the fears of the second wave of coronavirus. The U.S. Federal Reserve Chairman Jerome Powell warned on Tuesday that the second wave of coronavirus outbreak would damage consumer confidence and weaken the economy.

He was cautious that during the second outbreak, the government and people could withdraw again from the economic activity. He added that the worst part of the second wave would be the downward impact on public confidence, which could play a crucial role in getting back to economic activity.

In Republican Arizona, gyms bars, movies, and theaters and water parks were shut down for at least 30 days. These institutions were reopened in middle May, but after the rise in the infected cases across the country, the government announced to shut them down.

The health care professionals in Houston have urged residents to remain at home, wear masks, and cancel gatherings in the wake of intensified virus cases. The residents of Houston also received an emergency alert on their phones to stay home as virus infections have spiked in the town.

Daily Support and Resistance    

  • R3 107.39
  • R2 107.31
  • R1 107.27

Pivot Point 107.19

  • S1 107.14
  • S2 107.07
  • S3 107.02

USD/JPY – Trading Tips

On Wednesday, the USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

Categories
Forex Basic Strategies Forex Daily Topic

Stop Hunting – The Strategy That Is Used By Most Of The Investment Banks

Introduction

Introduction

Introduction

Currently, there is a strategy that is followed by most investment banks around the world, and that is known as Stop Hunting. It attempts to force some market participants out of their positions by driving an asset’s price to a level where many retail traders set their stop-loss orders. The triggering of many stop losses at once generally leads to high volatility, and this can present opportunities to some smart traders who seek to trade in such an environment.

The fact that the price of a currency pair can experience sharp moves when many stop losses are triggered is exactly why many traders engage in stop hunting. Traders who are aware of this fact and have observed this phenomenon of the market try to make of this opportunity by being patient and conservative. The strategy we will be discussing today takes advantage of this sudden rise in volatility due to what is known as ‘stop-hunting.’

Timeframe

The beauty of this strategy is that it can be employed on all timeframes. However, it is not recommended in extremely small timeframes as there is a lot of noise in those timeframes, which may lead to confusion and misunderstanding. Hence, if one wants to profit greatly from this strategy, he/she should trade in 15 minutes or a higher time frame.

Indicators

We will be using just one technical indicator, and that is ‘Simple Moving Average (SMA)’ with 5 or 10 as it’s period. No other indicators are used in this strategy.

Currency Pairs

The strategy is suitable for trading in all currency pairs, including major, minor, and some exotic pairs. However, illiquid currency pairs should be avoided as the price action patterns are not reliable in these pairs.

Strategy Concept

In this strategy, we will be using the concept of previous highs and lows instead of support and resistance to act as our reference points. This is easy to understand and easier to spot in a chart. We will then anticipate these highs and lows as our support and resistance areas, which could break out of. Lows on a price chart are points where the price found support and started to go up.

In other words, this is a price point where there were ready sellers. When price revisits that area, sell orders get triggered, and the price starts to fall. However, during a breakout scenario, the momentum of the price is so much that it breaks the previous high and continues moving south. The Opposite is true for the breakdown of previous lows.

At times it is seen that even when the previous high or low is broken, the price doesn’t always continue in the direction of the breakout or breakdown. The price immediately retreats and bounces off the high or low. We will call these scenarios as fake-out or ‘stop-loss hunt.’ When price retraces back immediately, there is a high chance that it will continue in the same direction, at least until the latest hurdle. Let us explore the steps of the strategy.

Trade Setup

To explain this strategy, we will consider the EUR/USD currency pair and find a trade that fulfills all the criteria of the strategy. In this example, we will be analyzing the 1-hour time frame chart and look for appropriate price action patterns in the pair.

Step 1

The first step of the strategy is to look for highs and lows from where the market has traveled a fair amount of distance. Spotting for such areas in the direction of the major trend is preferred as the risk is lower in such trade setups. For instance, look for buying opportunities at lows of an uptrend and selling opportunities at the highs of a downtrend. This step is very important from a risk aversion point of view. Thus, one should give a lot of importance to this step of the strategy.

Step 2

The next step is to look for a fake-out price action pattern at the low, marked in the previous step. This is the first confirmation that buyers or sellers have come back into the market, and the banks have cleared out all the strategies that were placed below the low and above the high.

The below image shows how the price goes slightly below the previous low clearing all the stops of retail traders, and the last candle closes with a great amount of bullishness.

Step 3

In this step, we see where we take an entry in the market. We take an entry right after the price starts moving higher or lower and closes above or below the simple moving average (SMA), respectively. Conservative traders can wait for the price to retrace to the SMA and then take an entry while aggressive traders can enter right at the close of the candle.

The arrow mark in the below image shows that the entry is made at the close of the second bullish candle after the fake-out.

Step 4

We have one take-profit and one stop-loss point for this strategy where we take profit at the high or low as we had marked in the first step of the strategy while stop loss is placed below or above the low and high, respectively. If one is trading in the direction of the major trend, he/she can take profits at new highs or lows. However, one needs to be conservative while taking counter-trend trades.

Strategy Roundup

Stop-loss hunts are becoming as common as breakouts. By including this strategy in our trading arsenal, we will have something that we could use when we notice such patterns in the market where other traders are looking for breakouts. In this strategy, we have put a significant amount of stress on price action, which makes this strategy very reliable and consistent. One can use trailing stop-loss to protect their profit even when the target isn’t reached. All the best!

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Forex Course

137. Differentiating between a Retracement and a Reversal

Introduction

Introduction

Introduction

Broadly speaking, there are three states in the market – trend, range, and channel. If we were to go a little more in detail, a market has components like retracement and reversal. Identifying and differentiating between a retracement and reversal is a skill in itself. In this lesson, let’s go and understand what these terms mean and how to differentiate them.

What is Retracement?

Retracement is the terminology usually associated in a trending market. We know that in a trending market, the price moves in one specific direction. For instance, an uptrend is defined as a sequence of higher highs and higher lows. As per the definition of an uptrend, the prices do not keep moving higher and higher continuously.

After trending up to a certain point, the price temporarily moves in the opposite direction. This movement against the original trend is referred to as retracement. Technically, the price action from a higher high to the higher low is called a retracement.

Uptrend Example

Downtrend Example

What is a Reversal?

A reversal can be defined as the overall change in the direction of the market. A market can reverse from an uptrend to a downtrend, or from a downtrend to an uptrend.

Reversal to the Upside

In this type of reversal, initially, the market trends in a downtrend making lower lows and lower highs. Later, the market goes into a transition state where the price typically ranges for a while. In other words, the price stops making lower lows and lows highs. Instead, it makes equal lows or higher lows. Finally, the market starts to trend north by making higher highs and lower lows.

Reversal to the Downside

This reversal happens when the market transits from an uptrend to a downtrend. In an uptrend, the price makes higher highs and higher lows. But, when the trend begins to diminish, the higher highs turn into equal highs, and higher lows start to become equal lows. Finally, when the seller’s pressure comes in, the price begins to make lower lows and lower highs, forming a downtrend. Thus, the complete scenario is referred to as a reversal.

Predicting a possible reversal or retracement in the market is pretty challenging. If you’re stuck in a position and unsure if it is a retracement or a reversal, you may try the following options to manage the trade:

  • Hold onto your positions by keeping the stop loss as it is. If it is a retracement, you can ride the trade, else get stopped if it is a reversal. This is the simplest approach.
  • If you are more inclined towards a reversal than a retracement, then you may close your positions. Based on where the market breaks through, you can look for re-entry. But, you might have to compromise on the risk: reward.
  • You could close the entire position and stay away from the pair and look for other opportunities. This is the safest option possible, especially for conservative traders.
[wp_quiz id=”79176″]
Categories
Forex Assets

Asset Analysis – Trading The Natural Gas Commodity Asset

Introduction

Introduction

Introduction

Natural gas is a soft commodity that is extensively traded in the market, like Crude Oil. The price changes every moment, as it is publicly traded on an exchange. The price of natural gas is determined by supply and demand in the physical market, as well as the demand and supply from the traders in the online market.

Understanding Natural Gas

Trading natural gas in the online market is speculating the short-term price fluctuations. Buying natural gas is only an electronic transaction and does not mean the physical purchase of the commodity.

There are several ways to trade natural gas in the online market. One of the heavily traded ways is through futures contracts. A futures contract is a contract (agreement) to buy or sell an asset at a future price.

Chicago Mercantile Exchange (CME Group) is the route through which nature gas futures is traded. There are many types of natural gas and its contracts that can be traded. However, the most traded contract is the Henry Hub Natural Gas Futures (NG).

Each contract of NG represents 10,000 million British thermal units (mmBtu). In the futures exchange market, NG fluctuates with a minimum of $0.001. In other words, a $0.001 price movement in NG represents one pip (tick). Like pip value in forex, the tick value of NG is $10. For every tick in price, a trader will see a $10 change in P/L.

Natural Gas Specification

Fees Associated with Natural Gas Futures Trading

There are different types of fees involved while trading natural gas futures. Typically, there are four basic fees that a brokerage charges for every futures contract traded:

  • Exchange/Clearing fees
  • National Futures Association (NFA) fee
  • Data fees
  • Brokerage commissions

The types of the fee listed above are either charged “per side” or “round turn” basis. Also, it varies from broker to broker.

Trading Range in Natural Gas

A trading range represents the price fluctuations in natural gas in different time frames. Similar to pips in currency pairs, the price movement in natural gas is represented in ticks, where each tick is an increment of $0.001.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a significant period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

Cost as a Percent of the Trading Range

Cost a percent of the trading range is the depicts the variation in fees on the trade-in different time frames for varying volatility. It is simply the ratio of the total fee and the tick values.

Total fee (per contract) = $50 (5 ticks) [approx. fee]  

Trading the Natural Gas

Natural gas is heavily traded in the futures market. It is a soft commodity like Crude Oil and is quite popular in the commodity space. Traders speculate on natural gas using both fundamental and technical analysis. The fundamentals of NG vary from that of other commodities, while the technical analysis works perfectly the same as any other asset. The fee structure, too, is pretty different from that of currency pairs, as it is mostly traded in the futures market. However, the total fee is more or less the same.

Understanding the fee variation

The fee is something that varies relatively with the change in time frame and volatility traded. In essence, a trader trading the 1H time frame will have to pay relatively more fee than a trader speculating on the 4H. Due to this, the percentage values are higher on the 1H time frame than the 4H time frame.

Likewise, the relative fee is higher when the market volatility is at the minimum values, even though the time frame remains the same. So, to efficiently manage the fee, one must trade during the times when the market volatility is at or above the average values.

Categories
Forex Options

FX Options Market Combined Volume Expiries for 1St July 2020

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

………………………………………………………………………………………………………………

FX option expiries for July 1 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

  • 1.1180 593m
  • 1.1220 625m
  • 1.1270 1.4bn
  • 1.1350 968m

EURUSD pair is failing to find the bid tone which accelerated it up and away from the 1.1200 level yesterday. Price action is muted and consolidating before the next trend develops. Euro-area data and US data including FOMC Minutes may help to find the next push. The 1.1220 option maturity remains in-play and the most likely candidate.

– GBP/USD: GBP amounts

  • 1.2400 503m

GBPUSD pair is maintaining its bid tone from yesterday. The 1.1200 option expiry is well within range. US data out later will play a role in the next direction.

– USD/JPY: USD amounts

  • 107.30 405m

USDJPY pair is oversold on the one-hour chart. But the push higher from yesterday may have resulted in some profit-taking. The 107.30 option maturity is in play. US data out later will play a role in the next direction.

– NZD/USD: NZD amounts

  • 0.6430 802m
  • 0.6450 870m

Yesterday’s break out to the upside of a narrow consolidation range for the NZDUSD pair on the one-hour chart went nowhere. Expected muted price action until the US data out later.

……………………………………………………………….

As you can see on the charts, we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled in red, orange and blue.  Therefore, if you see option expiry exchange rates labelled in red these should be considered in-play, because we believe there is a greater chance of the expiry maturing at these levels based on technical analysis at the time of writing. There is still a lesser possibility of a strike if they are in orange and so these are ‘in-play’ too. However, if we have labelled them in blue, they should be considered ‘not in-play’ and therefore price action would be unlikely to reach these levels, which are often referred to as Strikes, at the time of the 10 AM New York cut.

Our technical analysis is based on exchange rates which may be several hours earlier in the day and may not reflect price action at the time of the maturities. Also, we have not factored in economic data releases or keynote speeches by policymakers, or potential market volatility leading up to the cut.

Although we have added some technical analysis, we suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage. Remember the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 AM Eastern time.

 If you want to learn how forex option expiries affect price action in the spot FX market see our educational article by clicking here: https://bit.ly/2VR2Nji

DISCLAIMER: Please note that this information is for educational purposes. Also, the maturities will look more or less likely to become a strike at 10 AM NY time due to exchange rate fluctuations resulting in a different perspective with regard to technical analysis, and also due to upcoming economic data releases for the associated pairs.

Categories
Forex Videos

Forex Fundamental Analysis For Novices – Policymaker Speeches!

https://youtu.be/BQiFJ6D0Ju8

https://youtu.be/BQiFJ6D0Ju8

Fundamental Analysis For Novices – Policymaker Speeches

 

Thank you for joining our educational video section for fundamental analysis for novices. In this video, we are going to be looking at policymaker speeches.

Most brokers provide an Economic Calendar. And traders use them to keep them advised of various types of economic data releases because these can significantly affect market volatility depending on the level of impact they will have upon their release. If you are not already using one, we strongly recommend that you start doing so. You can plan your trading day around them And try to avoid opening trades close to the release of such data until you are a seasoned trader who understands just how such information can affect price action.


Most economic calendars are similar. However, the types of information which are key to traders are the release time, the type of events – in this case, we are looking at speeches -, the day and date, the likely impact that any speech might have on the market. In terms of general economic data releases, you will find that the actual data is released at the time signified on the calendar and where typically you might find a consensus by economic specialists as to what that data might be, and also the previous data release and where this can be compared to the actual data release, and the traders will gauge what effect that might have on an economy and of course thereafter the related currency exchange rates and stock market indices.


On the economic calendar for Monday the 22nd of June, we have highlighted four speeches by various policymakers. Typically these are announced ahead of time, and you will find them listed in an Economic Calendar. Some policymakers comment on the market unexpectedly, and a good example of that would be President Trump, who often tweets potentially market-moving comments pertaining to economic relevance, mostly in the United States.
So let’s look at some examples.


AT midnight BST, Philip Lowe, who replaced Glenn Stephen as governor of Australia Central Bank, will be making a speech regarding the health of the Australian economy, and this has a high impact value attached to its importance.
Therefore, Traders will be paying particular notice to his comments because he has the power to influence interest rates and also monetary stimulus within the Australian economy, which is particularly significant at the moment due to the impact of the coronavirus pandemic.
Negative sentiments from Mr. Lowe will be seen as bearish for the Australian economy. This could affect their stock market and also lower the value of the Australian dollar against other counterparts in the forex market.

It would be advisable not to trade the Australian dollar during this event.

 


3:15 BST again on Monday the 22nd of June, the vice president of the European Central Bank, Luis de Guindos, a Spanish politician, will be making a speech regarding the eurozone economy.
The impact level of the speech is set as medium, and any unexpected comments, especially negative ones, could cause market volatility, especially with the euro, including the EURO USD and cross currency pairs.
During a recent speech from Madrid during May this year, Mr de Guindos Stated that the eurozone had left the worst of the pandemic behind in terms of economic impact from the coronavirus pandemic, although he mentioned that it was likely that the eurozone would take two years to recover. This type of comment is both dovish and hawkish. Hawkish because he says the worst is over, and dovish because he says there are still two years of recovery ahead of the eurozone economy. He finished his speech by saying that the eurozone economy is facing a deep recession due to the coronavirus pandemic, and therefore analysts and Traders will be looking at this forthcoming speech to ascertain if he is Leaning more one way than the other.
Dovish comments would be seen as bearish for the euro currency and might cause a lowering of the euro exchange rates against its counterparts.
It is highly unlikely that his comments will be hawkish and therefore have a bullish effect on the market after such recent comments, as mentioned above.


At 4 p.m. BST, again on Monday the 22nd of June, the Bank of Canada governor Tiff Macklem, will be making a speech about economic policy in Canada and where this has been given an impact value of high.

The Canadian dollar is highly sensitive to policymaker speeches and where the currency can be particularly volatile during economic data releases and speeches. Again traders and analysts and economists will be looking for policymaker decisions from the governor that offer strong potential of keeping the country’s recovery on track from the fall out of the pandemic.

They will also be looking for hints from the governor regarding future interest rate decisions and stimulus packages to keep Canada from going further into recession.
As mentioned previously, the Canadian dollar is highly susceptible to volatility during these types of economic events and is strongly recommended that you do not trade during such times of release. Wait until trends are developing post data release, and try and get on those rather than trying to second guess which direction the currency will go at the actual time of economic release.

Categories
Forex Course

136. Learning To Trade The Ranging Market?

Introduction

Introduction

Introduction

A Range is a state of the market where the prices move back and forth between the upper bound and the lower bound. A ranging market is also referred to as a choppy, sideways, or a flat market. Unlike a trend, the prices do not move in one specific direction for a long time. A range on a time frame, when looked on a smaller time frame, the price trends in one direction for a while, reverses its direction, and trends in the opposite direction.

Understanding Support and Resistance

Knowing support and resistance is an essential concept to understand a range. These two terms form the basis of a range.

Support

In simple words, support is the level in the market where the prices tend to go up. It is the region where the buyers are interested to aggressively buy the security, causing the prices to shoot up. In other words, it is an area where there is a high demand for the currency pair. A level can be regarded as support when the price reacts multiple times (with power) from that area.

Resistance

Resistance is a level in the market where the prices tend to drop. It is the price where sellers are willing to sell or short sell the asset. They prevent the market from going higher from a specific level. Resistance is no different from that of supply.

Resistance can be understood in terms of buyers. It is an area in the market where the buyers are not interested in buying at that price as they find it expensive. Since there is no demand from the buyers, the prices drop. And when it drops to the support area, the buyers show up again. Thus, due to a higher demand than supply at the support region, the prices rise.

The combination of both support and resistance makes a range. For instance, let’s say the market drops to the $5 mark every time it touches the $10 price. Visually, the market is moving sideways, and such a market is referred to as a range. Here, the $5 price is the support level, and the $10 price is the resistance. A similar example of the same is illustrated below.

ADX indicator for ranging markets

The Average Directional Index indicator can be applied to determine if the market is trending or ranging. A value above 25 indicates that the market is in a strong trending state, while a value of less than 25 signifies that the market is in a consolidation (range) state.

Below is the live chart of AUD/CAD on the 4H time frame. Looking at the chart from a bird’s eye perspective, the market started as an uptrend, held for a while, continued with the same trend, and is currently ranging again. In this sequence, we can observe that the ADX was below the 25-mark line when the market was consolidating, and greater than 25 when it was trending upwards.

We hope you found this lesson on ranging markets interesting and informative. In the next lessons, we shall get into more detail and understand concepts like retracements and reversal. Happy learning!

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Categories
Forex Daily Topic Forex Price Action

The H1-15M Charts Combination Trading: Watch Out for Signal Candle’s Attributes

Reversal candle’s attributes play a significant role in driving the price towards the trend. An Inside Bar is considered to be the weakest reversal candlestick. However, in combination trading, even an Inside Bar may create good momentum as a reversal candle. In today’s lesson, we are going to demonstrate an example of that.

Reversal candle’s attributes play a significant role in driving the price towards the trend. An Inside Bar is considered to be the weakest reversal candlestick. However, in combination trading, even an Inside Bar may create good momentum as a reversal candle. In today’s lesson, we are going to demonstrate an example of that.

Reversal candle’s attributes play a significant role in driving the price towards the trend. An Inside Bar is considered to be the weakest reversal candlestick. However, in combination trading, even an Inside Bar may create good momentum as a reversal candle. In today’s lesson, we are going to demonstrate an example of that.

This is an H1 chart. The chart shows that the price heads towards the South with good bearish momentum. The price has a bounce at a level of support and makes a bullish correction. The sellers are to wait for a bearish breakout at the lowest low of the wave.

The chart produces a bearish reversal candle that comes out as a bearish engulfing candle. The last candle comes out as a bearish candle as well. However, it has a long lower shadow.

The chart makes a breakout at the lowest low of the wave. The last candle comes out as a bullish engulfing candle, which is a strong bullish reversal candle. However, the sellers may still keep their hope. If the breakout level produces a bearish reversal candle, they are right on the track.

This is what the H1-15M combination traders are waiting for. It produces a bearish reversal candle. Now they have to wait for a 15 M bearish candle to go short in the pair. It is time for the combination traders to flip over to the 15M chart.

This is how the 15M chart looks. The sellers are to wait for the price to produce a bearish candle closing below the last 15M candle. Let us wait and see what the price does. Let us proceed to the next chart.

The last candle comes out as a bearish candle without having any lower shadow.

The sellers would love to see a candle like this every time as a signal candle.  The combination traders may trigger a short entry right after the last candle closes. Let us find out how the entry goes.

This is the H1 chart again. The price heads towards the South with extreme bearish momentum. The last candle comes out as a doji candle. The price hits 1R within two candles. Those who love letting their winners run, they may close their entry right after the last candle closes.

If we notice, the bearish reversal candle at the breakout level comes out as an Inside Bar. However, it creates a strong bearish momentum. It is because the 15M signal candle comes out as a strong bearish continuation candle. Thus, combination traders may focus more on the signal candle. Signal candle’s attributes are more important than the reversal candle’s attributes as far as chart combination trading is concerned.

 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 30 – Top Trade Setups In Forex – Eyes on U.S. News! 

On the news front, it’s going to be a busy day in the wake of U.S. Chicago PMI, C.B. Consumer Confidence, and Fed Chair Powell Testifies. The European session may exhibit muted trading, but the New York session is likely to bring sharp movements in the market, and we can expect breakouts.

On the news front, it’s going to be a busy day in the wake of U.S. Chicago PMI, C.B. Consumer Confidence, and Fed Chair Powell Testifies. The European session may exhibit muted trading, but the New York session is likely to bring sharp movements in the market, and we can expect breakouts.

On the news front, it’s going to be a busy day in the wake of U.S. Chicago PMI, C.B. Consumer Confidence, and Fed Chair Powell Testifies. The European session may exhibit muted trading, but the New York session is likely to bring sharp movements in the market, and we can expect breakouts.

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12423 after placing a high of 1.12876 and a low of 1.12149. Overall the movement of the EUR/USD pair remained bullish throughout the day. During the Monday session, Euro broke higher and reached near 1.1300 level; however, U.S. dollar strength caped on any additional gains and took the prices away from that level. European Union has been praised for its handling of coronavirus crisis through its stimulus plans, and despite the increasing numbers of infected cases around the world, the E.U. has decided to open its gates for 15 countries.

European Union revealed a new list of countries that will be permitted to enter the E.U. from July 1 when external borders will be officially reopened. However, the U.S. was excluded from the permitted countries to enter the E.U. due to coronavirus developments. This raised Euro across the board on the hopes that tourism will aid in the fast E.U. economic recovery.

China was also excluded from the “safe list” of the European Union; however, if the Chinese government would offer a reciprocal travel deal for E.U. citizens, then the E.U. will add China to its “safe list.” E.U. has said that the safe list will be reviewed every two weeks and will be adjusted according to the coronavirus developments in each country.

Furthermore, Germany’s finance minister and lawmakers said on Monday that the European Central Bank (ECB) had met the principle of proportionality with its stimulus package that ended the legal conflict threatening to undermine central bank policy. The German Constitutional Court last month gave ECB 3 months to justify bond purchases under its stimulus plan –PSPP or lose German central bank as a participant. This raised Euro in the financial market and pushed EUR/USD pair higher on Monday.

On the data front, The German Prelim CPI for June surged to 0.6% from the expected 0.3% and supported Euro. At 12:00 GMT, the Spanish Flash CPI for the year was dropped by 0.3% against the expected drop by 0.9% and supported the single currency Euro.

The better than expected CPI data from Germany and Spain gave strength to Euro, which added in the gains of EUR/USD pair on Monday.

On the other hand, from the American side, the Pending Home Sales for May increased to 44.3% against 18.9%, which gave strength to the U.S. dollar that exerted downward pressure on EUR/USD at 19:00 GMT.

The U.S. Dollar was also intense because of its safe-haven status during increased US-China tensions and China-India conflict and rising number of coronavirus cases in the U.S. & many other countries. This dragged the rising EUR/USD and limited the gains of the pair on Monday.

Daily Support and Resistance

  • R3 1.1241
  • R2 1.1235
  • R1 1.1229

Pivot Point 1.1223

  • S1 1.1217
  • S2 1.1211
  • S3 1.1205

EUR/USD– Trading Tip

The EUR/USD is holding below a strong resistance level of 1.1245 level, the closing of candles below this level is suggesting chances of selling bias until 1.1218 level. Continuation of selling trend below 1.1218 level can extend selling until 1.1195 level today. Conversely, a bullish breakout of the 1.1245 level can extend buying until 1.1289. The RSI and MACD are still in a bearish zone, while the 50 EMA also suggests selling bias. Therefore, we should look for selling trades below 1.1223levels.  

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.22980 after placing a high of 1.23893 and a low of 1.22513. Overall the movement of GBP/USD pair remained bearish throughout the day. The Pound was already weak against the U.S. dollar, and the decline in Pound gained speed after the risk-off market sentiment gained traction and made the U.S. dollar stronger on Monday in the late trading session.

On Monday, face-to-face negotiations on the post-Brexit trade deal between the E.U. & U.K. began after both parties pledged to intensify talks. It would be the first time the U.K.’s chief negotiator David Frost will meet in person with his E.U. counterpart Michel Barnier since the talks began in March. Negotiations were continued through the pandemic but virtually not in person due to coronavirus pandemic.

Boris Johnson has said that a deal could be reached this month with new momentum. PM Johnson met E.U. Commission President Ursula von der Leyen in a video conference this month and exclaimed that there were very good chances of getting a trade deal by Dec. The traders were cautious ahead of talks as to how they would go; so, British Pound came under pressure on Monday and dragged GBP/USD pair with itself.

Furthermore, Boris Johnson promised “an active approach to economy” while speaking at a school construction site. His comments came ahead of the launch of a task force to speed up the delivery of infrastructure projects. PM Boris Johnson said that “the cash is there” for long-term investment to help the U.K. recover from the coronavirus crisis and its impact on the economy. He announced that $1.23 B would be delivered to build the first 50 projects, including schools. The U.K. economy was contracted by 20.4% in April, the largest monthly fall on record due to the coronavirus crisis.

On the data front, The M4 Money Supply in May was released at 13:30 GMT, from the United Kingdom, which increased to 2.0% from the forecasted 1.6% and supported British Pound. The Mortgage Approvals from the U.K. in May were decreased to 9K against the forecasted 25K and weighed on British Pound. At 13:32 GMT, the Net Lending to Individuals for May decreased to -3.4B from the -4.0B and supported British Pound.

On the other hand, the Pending Home Sales from the United States for May came in as 44.3% against the expected 18.9%and supported the U.S. dollar. Better than expected data from the U.S. gave strength to the U.S. dollar, which added in the downward trend of GBP/USD on Monday.

The U.S. dollar was strong across the board due to its safe-haven status that was high due to the increased geopolitical tensions and intensified numbers of coronavirus cases around the world. Strong U.S. dollar weighed on GBP/USD pair on Monday.

Daily Support and Resistance

  • R3 1.2381
  • R2 1.2367
  • R1 1.2354

Pivot Point 1.234

  • S1 1.2327
  • S2 1.2313
  • S3 1.23

GBP/USD– Trading Tip

The GBP/USD is trading with a bearish bias, primarily upon the release of worse than expected GDP figures. The cable is trading at 1.2275 level, and it’s finding immediate support at 1.2258 level. Closing of candles below 1.2258 level can open further room for selling until 1.2175 level while the resistance continues to hold at 1.2400 level. On the 4 hour chart, the GBP/USD has also formed a downward channel, which is extend selling bias, along with the 50 EMA, MACD, and RSI as all of the technical indicators are in support of selling. Let’s consider taking sell trades below 1.2345 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.570 after placing a high of 107.882 and a low of 106.979. Overall the movement of USD/JPY remained bullish throughout the day. The USD/JPY extended its gains and raised for the 4th consecutive day on Monday on the back of improving risk sentiment that made it difficult for safe-haven Japanese Yen to find demand.

On Monday, China said that it would impose visa restrictions on certain United States individuals in response to the same move by Washington on Chinese officials over the Hong Kong issue. The Chinese Ministry of Foreign Affairs spokesman Zhao Lijian said that the visa restrictions would be imposed on confident Americans with egregious conduct relating to Hong Kong.

He added that national security law for Hong Kong was purely China’s internal affairs, and foreign countries had no right to interfere. He said that attempts from Washington to destruct China’s legislation for safeguarding national security in Hong Kong would never succeed. This increased the risk sentiment, and hence, the USD/JPY pair gained.

On the data front, the Retail Sales for the year from Japan was released at 4:50 GMT, which dropped by 12.3% against the forecasted decline by 11.6% and weighed on Japanese Yen that raised USD/JPY across the board. At 19:00 GMT, the Pending Home Sales from the United States on Monday for May increased to 44.3% against the forecasted 18.9% and supported the U.S. dollar, which helped USD/JPY to gain traction in the market. Meanwhile, the U.S. Dollar Index, which dropped to a daily low of 96.11, gained traction and reached 97.50 and helped the USD/JPY pair to surge further.

Daily Support and Resistance    

  • R3 107.39
  • R2 107.31
  • R1 107.27

Pivot Point 107.19

  • S1 107.14
  • S2 107.07
  • S3 107.02

USD/JPY – Trading Tips

Technically, the USD/JPY pair is trading with a bullish bias of around 107.660. On the three hourly charts, the USD/JPY is gaining bullish support by the regression channel. The upward channel has the potential to support the USD/JPY pair around 107.395 level. Closing of candles above this level can drive buying until 107.950, while below 107.390, the USD/JPY may drop until 106.835 level. The 50 EMA is supporting bullish bias; therefore, we should look for buying over 107.350 today. Good luck! 

Categories
Forex Options

FX Options Market Combined Volume Expiries for 30th June 2020

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

……………………………………………………………………………………………………………………..

FX option expiries for June 30 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

  • 1140 712m
  • 1185 1.6bn
  • 1250 1.5bn
  • 1300 1.4bn

EURUSD pair is oversold on the one-hour chart with support to be found at the key 1.120 level. Expect this to be tested during the European session with the 1.1185 option expiry looking like a firm candidate for a strike at the New York cut

– USD/JPY: USD amounts

  • 107.35 465m
  • 107.50 696m

The USDJPY pair is struggling (one hour chart) after a push higher which formed a double top from yesterday’s range bound break out to the upside. Although the bull run will likely continue after a period of consolidation, our two option expiries may well act as a magnate until after the New York cut.

– AUD/USD: AUD amounts

  • 0.6900 1.4b

AUDUSD will follow US$ impetus today, and that can only mean pressure to the downside as the Greenback strengthens. Consolidation is also seen where price action is failing to recapture ground around 0.6900.

– NZD/USD: NZD amounts

  • 0.6360 1.4b
  • 0.6400 245m

NZDUSD is in a tight consolidation phase on the one-hour chart. The pair will be dominated by the US$ during the European and US session today. 0.6400 looks to be in-play and is right on the support line.

………………………………………………………………………………………………………………………..

As you can see on the charts, we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled in red, orange and blue.  Therefore, if you see option expiry exchange rates labelled in red these should be considered in-play, because we believe there is a greater chance of the expiry maturing at these levels based on technical analysis at the time of writing. There is still a lesser possibility of a strike if they are in orange and so these are ‘in-play’ too. However, if we have labelled them in blue, they should be considered ‘not in-play’ and therefore price action would be unlikely to reach these levels, which are often referred to as Strikes, at the time of the 10 AM New York cut.

Our technical analysis is based on exchange rates which may be several hours earlier in the day and may not reflect price action at the time of the maturities. Also, we have not factored in economic data releases or keynote speeches by policymakers, or potential market volatility leading up to the cut.

Although we have added some technical analysis, we suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage. Remember the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 AM Eastern time.

If you want to learn how forex option expiries affect price action in the spot FX market see our educational article by clicking here: https://bit.ly/2VR2Nji

DISCLAIMER: Please note that this information is for educational purposes. Also, the maturities will look more or less likely to become a strike at 10 AM NY time due to exchange rate fluctuations resulting in a different perspective with regard to technical analysis, and also due to upcoming economic data releases for the associated pairs.

Categories
Forex Course

135. All About The Trending Market

Introduction

Introduction

Introduction

In the previous chapter, we understood the different states that exist in the market, which were trends, ranges, and channels. In this and the upcoming lessons, we shall go over each one of the types in detail.

What is a Trending Market?

A trending market is the type of market where the prices move in one specific direction. Of course, the prices change the direction temporarily, but the overall direction will still be in one direction.

Since there are two directions in the market, there are two types of trends: one facing upward and the other facing downward. The former is referred to as an uptrend, and the latter is called a downtrend. Having that said, there are some rules and criteria to confirm a market is trending.

How to Identify a Trend?

There are quite a number of ways to identify and confirm a trend. One can use price action patterns or technical indicators to identify if a market is trending.

Price Action pattern

The concept of highs and lows on the price charts is used to determine if the market is trending upwards or downwards.

Uptrend

In an uptrend, the market makes higher highs and higher lows. Multiple sequences of this pattern confirm that the market is trending up.

Downtrend

In a downtrend, the price makes multiple sets of lower lows and lower highs.

ADX Indicator

Another way to determine if a market is trending is by applying the Average Directional Index (ADX) indicator. It was created by J. Welles Wilder, where the indicator has values between ranging between 0 and 100. The magnitude of the value determines the strength of the trend. The larger the number is, the stronger the trend.

Typically, a value greater than 25 indicates that the market is in a strong trend, either uptrend or downtrend. It is a non-directional indicator, where the value is always positive irrespective of the direction.

Note that ADX is a lagging indicator and does not really determine the future of the market. Thus, it cannot be employed for timing your entries and exits.

Moving Average

Simple moving averages can also be used to determine if the market is in a trending state. Add the 7 period, 20 period, and the 65-period MAs on the price chart. When all three MAs compresses and fans out, and if 7 period MA is below the 20-period MA and 20 period MA is below the 65-period MA, then it confirms that the market is in a downtrend.

Conversely, if the 7 period MA is above the 20 period MA and the 20 period MA is above the 65-period MA, then the market is officially in an uptrend.

These were some of the most popular techniques to identify and verify whether the market is trending. However, they are not strategies to trade a trend. Nonetheless, they can be used to give heads up to any trend trading strategies.

[wp_quiz id=”78831″]
Categories
Forex Assets

Analyzing The Costs Involved While Trading The ‘CHF/BGN’ Exotic Pair

Introduction

Introduction

Introduction

CHF/BGN is the abbreviation for the Swiss Franc and the Bulgarian Lev exotic pair. Here, CHF is the base currency, while BGN is the quote currency. The pair as a whole explains the number of units of the quote currency (BGN) that is required to buy a single unit of the base currency (CHF). BGN stands for The Bulgarian Lev, and it is the official currency of Bulgaria.

Understanding CHF/BGN

In the Forex market, we always purchase the base currency while selling the quote currency and vice versa. Here, the market value of CHF/BGN helps us to comprehend the potential of BGN against the CHF. So if the exchange rate of the pair CHF/BGN is 1.8384, it means to buy1 CHF we need 1.8391 BGN.

CHF/BGN Specification

Spread

Spread in exchange is the distinction between the bid-ask price proposed by the broker. It is quantified in terms of pips and fluctuates on the type of account and kind of broker. Below is the spread for the CHF/BGN pair in both ECN & STP accounts.

Spread on ECN: 7 | STP: 12

Fees

Fees are the commission charged by the broker for each trade a trader takes. The fee varies on both types of accounts and brokers. For our analysis, we have maintained the fee flat at five pips.

Slippage

A trader will not get the price that he demands, due to the volatility in the market. The original price varies from the asked price. The difference is termed as slippage. For instance, if a trader performs a trade at 1.8384, the actual price received would be 1.8391. The difference between the two pips is called slippage.

Trading Range in CHF/BGN

The trading range is a tabular interpretation of the min, average, and maximum pip movement in a specific timeframe. Obtaining understanding about this is essential because it helps manage risk and determine the appropriate times of the day to enter-exit a trade with minor costs.

Below is a table representing the minimum, average, and maximum pip movement (volatility) in various timeframes.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

CHFBGN Cost as a Percent of the Trading Range

The above table illustrates the number of pips the currency pair move in the various timeframe. We will apply these values to identify the cost ratio when the volatility is minimum, average, and maximum. The cost percentage will then help us sort the ideal time of the day to enter the trades.

The understanding of the cost percentage is straightforward. If the percentage is elevated, then the cost is high in that specific timeframe and range. If the percentage is low, then the cost is comparatively low for that timeframe and range. The total cost on every trade is calculated by adding up the spread, slippage, and trading fee.

ECN Model Account

Spread = 7 | Slippage = 5 | Trading fee = 8

Total cost = Slippage + Spread + Trading Fee  = 5 + 7 + 8 = 20

STP Model Account

Spread = 12 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee  = 5 + 12 + 0 = 17

The Ideal way to trade the CHF/BGN

It is not recommended to enter and exit the trade at any time of the day. To manage their trade, a trader must consider various timeframes during the day to reduce both risk and cost of the trade. This is made possible by understanding the above two tables.

In the minimum column, the percentages are generally high. This means the cost is very high when the volatility of the market is low. For example, on the 1H timeframe, when the volatility is three pips, the cost percentage is 666%. This means that one must accept high costs if they enter or exit trades when the volatility is around three pips. Preferably, it is advised to trade when the market’s volatility is above the average.

Additionally, it is considerably better if one trades placing the limit orders instead of market orders, as it invalidates the slippage on the trade. In doing so, the costs of each trade will reduce by approximately 40%.

STP Model Account (Using Limit Orders)

Spread = 12 | Slippage = 0 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 0 + 12 + 0 = 12

Categories
Forex Price Action

One Minute Down, Next Minute Up

The Double Bottom is one of the strongest bullish reversal patterns. When the price gets its second bounce at the same level and makes a breakout at the last swing high, the pattern it produces is called the double bottom. In today’s lesson, we are going to demonstrate an example of a double bottom in the H1 chart. At the end of the wave, an interesting thing happens. Let us proceed and find out how the double bottom offers entry and what that interesting thing is.

The Double Bottom is one of the strongest bullish reversal patterns. When the price gets its second bounce at the same level and makes a breakout at the last swing high, the pattern it produces is called the double bottom. In today’s lesson, we are going to demonstrate an example of a double bottom in the H1 chart. At the end of the wave, an interesting thing happens. Let us proceed and find out how the double bottom offers entry and what that interesting thing is.

The Double Bottom is one of the strongest bullish reversal patterns. When the price gets its second bounce at the same level and makes a breakout at the last swing high, the pattern it produces is called the double bottom. In today’s lesson, we are going to demonstrate an example of a double bottom in the H1 chart. At the end of the wave, an interesting thing happens. Let us proceed and find out how the double bottom offers entry and what that interesting thing is.

This is an H1 chart. The chart shows that the price has its second bounce and produces a bullish engulfing candle. Since the same level of support produces a bullish engulfing candle at the second bounce, it is going to have a strong impact on the market if it makes a breakout at the last swing high.

Here is the level of resistance, which the buyers are going to wait for a breakout to go long in the pair upon breakout confirmation. The price reacted at the drawn level earlier as well. Thus, this has been a significant level. The last rejection signifies it more.

Look at the next candle. The candle comes out as a bullish Marubozu candle. The candle closes well above the level where the price had a rejection earlier. Some buyers may want to trigger a long entry right after the last candle closes. Some buyers may wait for the breakout confirmation to go long in the pair.

The next candle comes out as a spinning top with a tiny bullish body. The price closes above the last candle’s highest high. It confirms the breakout. The buyers may trigger a long entry right after the last candle closes since they have the breakout confirmation.

See how the price heads towards the North with good bullish momentum. The price hits 1R within one candle. The last candle suggests that the price may continue its move towards the North. Let us see what happens next.

The chart produces a bearish inside bar. It suggests that the price is still bullish. If the next candle comes out as a bullish engulfing candle, the price may resume its journey towards the North with good bullish momentum. However, many buyers may come out with their profit and wait for the next bullish reversal candle to go long.

The price gets choppy within two horizontal levels. The last candle comes out as a bearish engulfing candle. Do you notice anything interesting here? Yes, the chart produces a Double Top this time, and it produces a bearish engulfing candle at the second rejection. The sellers may want to go short if the price makes a breakout at the last lowest low. This is how things change in the Forex market. It is interesting, is not it?

Categories
Chart Patterns

How to Use Continuation Chart Patterns to Set a Trading Strategy

Introduction

Introduction

Introduction

In our previous educational article, we presented a set of trend reversal patterns, which allowed the investor to participate from the beginning of a new trend. Sometimes, however, for various reasons, the investor doesn’t join the latest trend. When this situation occurs, a continuation pattern may present an opportunity for the investor to join and make an entry to the trend in progress.

In this educational article, we’ll present a set of continuation patterns that help traders to time new trades in the direction of the established trend.

Triangles

There are three basic types of triangles: symmetrical, ascending, and descending. A triangle pattern must contain at least two peaks and two valleys; however, considering the odds of a false breakout, in conservative trading, the investor should wait for the third peak (or valley) to complete and be able to recognize two valleys (or peaks) in the pattern.

The symmetrical triangle is characterized by having two converging trend lines. In a bull market, a buy-side position will trigger once the price breaks and closes above the upper trend line. The confirmation of this setup is given by a close above the last peak preceding the breakout.

On the ascending triangle, the upper trendline is horizontal and represents a short-term resistance, while the baseline is an ascending dynamic support. A market entry will be activated once the price breaks and closes above the horizontal guideline.

The descending triangle is a bearish continuation pattern in which the base guideline is short-term support, and the descending upper trendline acts as a dynamic resistance. A sell-side signal will rise once the price break and closes below the horizontal guideline.

The initial profit target corresponds to the range of the bigger height of the triangle pattern projected from the breakout level in the trend direction.

Rectangle Pattern

The rectangle formation generally acts as a continuation pattern; however, it can sometimes act as a reversal pattern when the price action develops a triple top or bottom structure. The next figure represents the rectangle pattern breakout.

A buy-side signal will arise if the price breaks and closes above the resistance, in a bear market, a sell-side signal will trigger once the price breaks and closes below the support of the sideways formation. An initial profit target level will be the amplitude of the rectangle pattern. Investors should be alert for false breakouts and set propper stop-loss levels and breakout confirmation rules.

Broadening Formation

The broadening pattern is a complex formation difficult to trade due to its divergent guidelines expands across time as an expanding triangle. The following figure illustrates the broadening pattern.

In a conservative market positioning, the investor should consider that this formation tends to appear at the end of a trend. On the other hand, investors should also wait for the completion of three peaks or valleys, and then the breakout and close above or below the previous high or low. Reward/risk ratios are a handicap in these formations, as the invalidation level tends to be far away from the entry levels.

Flag and Pennant Pattern

The flag pattern is a technical formation that goes against the prevailing trend that tends to retrace up to fifty percent of the previous movement. To trade this formation, the investor should wait for the flag structure to complete its three peaks or valleys depending on the last move.

A buy-side position will trigger once the price breaks and closes above the descending dynamic resistance. The initial profit target will be the price range of the previous upward move. A sell-side position will show up when the price completes three peaks and breaks and closes below the lower line of the flag.

The pennant pattern looks similar to a symmetrical triangle, but the pennant takes less time than a symmetrical triangle. A bullish position will be valid if the price completes three valleys and then breaks and closes above the pennant’s upper guideline. Similarly, a bearish trade will emerge once the price breaks and closes below the lower trendline of the pennant formation.

Wedge Pattern

The wedge pattern is a technical formation that looks like a symmetrical triangle moving with the primary trend, but whose outcome is mostly against it. In consequence, an ascending wedge is a bearish formation, and a descending wedge is bullish.

In a bullish wedge formation, the investor should wait for the three peaks to be completed before deciding a short position entry. The initial profit target will be defined by the range of the broadest side of the wedge (between the upper and lower guideline).

In a bear market, the entry setup requires that the technical formation completes three valleys before a buy-side order could be established.

Conclusions

In this educational article, we presented a set of chart patterns that could provide to the chart patterns’ investor a group of strategies to entry and exit setups from the market.

Trend-follower traders should remember that in financial markets, trends show up merely about 30%. In this context, continuation patterns provide opportunities to join the trend when it is already in progress.

In the following article, we’ll present a set of guidelines to use trendlines and trend channels to create a trading strategy.

Suggested Readings

  • Fischer, R., Fischer J.; Candlesticks, Fibonacci, and Chart Patterns Trading Tools; John Wiley & Sons; 1st Edition (2003).