Exfor

15/02/2023

A Guide to Free Demo Trading Accounts ✉️

If you’re a new trader, opening a demo trading account can help you learn the ropes and give you an understanding of how trading works. Demo trading accounts are free, allowing traders to practice their strategies with virtual funds.

The purpose of this article is to explain how to set up a demo trading account and what you need to do in order to do so.

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If you’re a new trader, opening a demo trading account can help you learn the ropes and give you an understanding of how trading works. Demo trading accounts

14/02/2023

What Is a Forex Robot?

It has become common nowadays for many traders to resort to using modern technological methods in trading operations, which provides them with many significant advantages.

An increasing number of traders prefer to use trading systems or software that allow them to automate their trades — reducing the burden of emotional stress while trading or compensating for poor self-discipline. These are precisely the tasks of a forex robot, and the MetaTrader 4 platform is one of the best trading stations that provide a suitable environment for using these automated programs.

👉MetaTrader 4
The MetaTrader 4 platform provides complete solutions to clients’ needs, including charts, news feeds and many more. You can also use the platform’s native programming language, MQL4, to write custom indicators or trading strategies, which are called expert advisors.

👉👉Expert Advisors
An expert advisor (EA) is one of the names given to forex robots, which are being developed to be suitable for use on the MetaTrader 4 platform. Given the ability of the trader to customize the settings of the expert advisor, he can benefit from this feature in the application of any trading strategy or risk management system as long as the designer knows how to code these settings within the program.

For example, a trader might design an expert advisor to open market positions of a specific size at the intersection of the moving averages.

Advantages of Forex Robots
The main advantage of using a forex robot is its ability to rid a trader of the negative influence of human emotions, which can be a huge drawback for many traders if they are not adequately managed. Feelings of fear, greed and emotional stress build up easily and quickly when trading manually, which can lead a trader to lose money and fall prey to frustration.

On the other hand, the robot allows the implementation of the required strategy very smoothly and with a high degree of accuracy. The robot can also do all the complex calculations of risk management elements in a flash faster than the trader himself. It does not depend on that, but you can design the robots so that they trade around the clock and in different market conditions, and thus you will not have to sit long in front of the computer screen all night and day.

In short, a forex robot can handle a great deal of the burdens and hard work of a trader, noting that the trader is already making strenuous efforts in the stage before running the trading program, especially in the stage of development and testing of ideas.

👉Negative Side of Forex Robots
Forex robots can be a handy tool in a trader’s arsenal, but they are not without their drawbacks. Forex robots tend to rely heavily on backtesting and past trends to make predictions about the future, meaning that they may not accurately identify market conditions as quickly as a human being who is better equipped to spot patterns and opportunities.

Furthermore, since forex robots are programmed to follow specific criteria, traders can’t always customize them according to their own individual investing style. As a result, many traders find that using a forex robot limits their ability to make unique decisions based on their own assessment of the markets. Any trader interested in automated trading needs to consider both the benefits and disadvantages of using forex robots before taking the plunge.

Of course, there is no easy way to make profits in the forex market, which is why it cannot be denied that there are some limitations and drawbacks associated with using forex robots. One such dark side is fierce competition in the forex market, and getting a robot that is effective enough to achieve reasonable success takes time and effort.

The fact is that testing a robot’s proficiency should not be limited to a few weeks, it should be applied to trading data for months or even years with rigorous statistical tests to prove how well it works. This step is essential because the trader’s need for more confidence in the robot will lead him sooner or later to ignore its signals in challenging times, which is the first step on the road to failure.

08/02/2023

Global Stock Indicators: Meet The Most Important Ones 🤞

The definition of stock indices is one of the frequently talked about terms due to its importance because it will be challenging to keep track of every security traded. We take a smaller sample of the market that is representative of the whole – similar to opinion polls that use surveys to measure the population’s sentiment.

This smaller sample of the stock market is called stock indices, and it is a statistical measure of changes in a portfolio of stocks that is part of the market as a whole.

Investors and other market participants use global stock indices to track stock market performance.

Ideally, a change in the price of stock indices represents a completely relative change in the stocks included in the stock index. Where stock indices have increased by 1%, for example, it means that the stocks that make up this financial index have also increased by an average of 1%.

Let’s see how global stock indices work using a simple example: Let’s say we create an index to track the price of a gallon of milk.

Let’s say it costs $2.00 per gallon to consume milk. The initial index value is 1.00, or 1%.

When milk costs $2.50, our index will be 1.25, reflecting a 25% increase in milk price. If milk costs $2.25, the index is 1.15. The .10 change reflects a 10% decrease in the price of milk.

Relationships between stock indices and currencies
Currencies are the most difficult asset class to fit into the fixed or idealized market correlation model.

At first, in order to buy stocks from a particular country, investors have to pay in the local currency, which increases the demand for it.

Conversely, a strong currency makes bonds and stocks from that particular country look attractive.

However, the correlation is only sometimes clear, as there is a delay in the response between each of the reactions of the markets, forex, and stocks, which leaves the investor owning foreign stocks exposed to fluctuations in the exchange rate.

The correlation can also be fragile between the international stock indices themselves.

There are so-called “global aberrations” when the stock market in one country begins to perform better than the stock market in another country.

This is often caused by currency-driven capital flows from weaker countries relative to the stock market to countries with a more robust stock market.

Stock indices
Stock indices can be classified in different ways, but here we will focus on the two most essential classifications through which you can take a look at the most important types of these indices, which are:

National key global indicators
These indices represent the performance of securities in a specific country and reflect investors’ feelings about the country’s economic situation. National indices include shares of major companies listed on the country’s largest stock exchanges.

For example, when looking at the “FTSE 100” index, we see that it contains the shares of the hundred largest British companies listed on the London Stock Exchange, and it is not a condition that these companies are owned by the government. They can be one of the private sector companies. These are considered shares of the investors’ feelings towards the UK economy so far.

The same applies to the “Nikkei 225” index, which is located on the Tokyo Stock Exchange in Japan and represents the 225 largest Japanese companies.

The leading global indices in sectors
These indicators are more specialized as they track the performance of a specific stock market sector, and investment returns and risks for a specific sector can be measured through a detailed study of these indicators.

For example, the Morgan Stanley Biotechnology Index includes the 36 largest companies operating in the biotechnology industry, which represent the performance of this sector in the United States, through which investment in the biotechnology sector can be studied.

Global stock indices
We come to another part, which is what interests us as traders in the CFD markets, as many forex companies provide trading on global stock indices efficiently through CFDs, and the most important and most popular indices among traders:

👉 The Dow Jones DJ 30 Index includes the 30 largest industrial companies listed on the New York Stock Exchange, the most popular among traders, and the largest in terms of liquidity.
👉 The Nasdaq NQ 100 index contains the 100 largest companies operating in the technology sector in the United States, which we often hear about or use their devices daily, such as Apple, and the online shopping giant Amazon.
👉 FTSE 100 Index: This index is located on the London Stock Exchange and contains shares of the 100 largest British companies.
👉 The DAX 30 Index is one of the German indices and consists of the 30 largest companies on the Frankfurt Stock Exchange.
👉 CAC 40 Index: One of the leading indicators in the French market, which is widely known among traders in the Arab world.
👉 Nikkei 225 index: It is considered one of the leading indices on the Tokyo Stock Exchange in Japan and includes the 225 largest companies listed on the stock exchange.
Pros and cons of trading stock indices
The main global indices are used very widely by all those interested in market movements due to their positive aspects, but they may also carry some negatives. Below we review the most prominent of them:

Advantages of the leading global indicators
👉 Simplifies the research process: Stock indices lift the heavy burden for investors who want to know how an industry, economy, or sector is performing.
👉 Instead of having to find relevant companies and study their performance on an individual basis, investors can watch one index of these stocks.
👉 Investors are allowed exposure to commodities: Depending on the sector being tracked by the stock index, buying stock indices may be the only option for the average investor looking to gain exposure to specific markets.
For example, only some have the space to store barrels of oil or sacks of wheat. Alternatively, these investors can purchase the appropriate commodity index that tracks the market in which they want to buy.

Global stock index funds are easy to gain exposure to specific markets or sectors without placing thousands of orders.

Disadvantages of the leading global indices:
👉 Stock indices are not always accurate: While a stock ticker is designed to simulate a particular market, this does not mean that it is 100% accurate. Just because you buy a forex market index in a particular region, it does not mean that your basket will perfectly reflect that region’s economy. Many factors can change the course of an economy, and sometimes it is difficult for a stock index to account for all of them accurately.
👉 Stock indices only sometimes have liquidity: It can be challenging to trade in and out of certain positions, depending on which stock index you track. If you are trading an obscure index, finding someone willing to buy or sell the security you want to trade can take time and effort. However, this is fine, with many stock market indices consistently seeing high daily trading volumes.
👉 All of the negative aspects of other forms of investing also apply to investing in stock indices. This includes issues with order type – market orders will be executed quickly but will not guarantee price, while limit orders control the price at the expense of timing.
How is the value of stock indices calculated?
Before the digital age, index price calculation took work. Today, most global stock indices use the weighted average formula to determine the index’s value. In this system, the weight of each share is: Share price x number of shares/market value of all shares

Most indices weigh companies by market capitalization. If the market capitalization of Mahi is 1,000,000 EGP and the value of all shares in the index is 100,000,000 EGP, then the company is worth 1% of the index. This means that the value of a stock index is a statistical measure of changes in a portfolio of stocks that are part of the market.

08/02/2023

Tips for Choosing a Good Forex Broker 🤲

In the 1970s, the Forex market or currency market was created, and in recent years it has experienced strong growth thanks to the Internet and new technologies. Some studies indicate that there are daily transactions in the Forex market for a value of 4 trillion dollars (the New York Stock Exchange moves 50 times less daily).

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In the 1970s, the Forex market or currency market was created, and in recent years it has experienced strong growth thanks to the Internet and new

08/02/2023

Leverage in Forex: A Double-Edged Sword

The Forex market is known for having specific characteristics different from other markets, such as its excellent liquidity, hours (it opens from Monday to Friday without interruption), and leverage.

We can operate with up to 1:500 leverage in the Forex market, depending on the broker. This means that for every dollar we have in our account, we can move 500 dollars in the market.

What is leverage?
Leverage is the relationship between equity and credit for those who don’t know yet. In other words: it is using debt, getting into debt, to finance a financial operation and obtain a higher return if the operation is successful. The more leverage, the greater the risk in our operations.

Advantages and disadvantages of leverage
Leverage has good things and bad things, like everything in life. As the main advantage, leverage allows us to grow our account more quickly as long as we manage it well. The main drawback of leverage is the risk of having high leverage without good leverage management.

What happens if we get too leveraged?
Well, we will be risking a lot for each operation (always assuming that the distance to the stop is the same and we only vary our leverage). In a few operations, we are going to decapitalize our account. Here asymmetric leverage comes into play, we could define asymmetric leverage as the progressive reduction of the ability to recover losses.

How do we calculate leverage in Forex?
First of all, it must be made clear that leverage is not a guarantee. The guarantees are the money the broker takes from our account when opening an operation. At the same time, leverage, as we have already explained before, is the relationship between own capital and credit.

And how do we calculate leverage? Very simple, dividing the face value of the operation that we have open, or operations that we have open if there is more than one, between our capital.

For example, let’s imagine that we have an account of €5,000 and that the total nominal amount of our operations in the Forex market is €100,000. The calculation would be as follows: leverage = (Nominal amount of operations)/(capital of our account) = 100,000/5,000 = 20. Our leverage would be 1:20. That is, for every euro that we take into account, we are moving 20 in the market.

And how do we know the nominal value of our Forex operation? For this, we will have to review some basic concepts of Forex trading. But in summary, with a lot, the face value of the operation is 100,000 monetary units of the base currency, with a mini-lot, the face value of the operation is 10,000 monetary units of the base currency. And with a micro-lot, the face value of the operation is 1,000 monetary units of the base currency.

Examples of asymmetric leverage
Let’s imagine that we have an account of €100, and in a trade, we have risked 1% of the account and lost it. That is, we have lost €1.

Now our account is €99 and to bring it back to €100 we have to earn 1.01% in the next operation, that is, what represents €1 out of €99, practically the same as what we have lost. But if instead of losing €1, we lose €10, 10% of the account, we will have to recover €10 out of €90, which is 11.11% of our current capital. And if we lose 25% of our account, we will have to earn 33.33% to bring it back to €100.

With a 2% risk per trade, we will need a 15-consecutive losing streak to pass this point. With a 3% risk, we will need a total of 10 consecutive losses to pass this point, and with a 10% risk per trade, we will pass this point with the third loss in a row.

This is an approximation to see what would happen if we go too far with the leverage since, in actual operations, monetary management would also come into play.

What is the optimal leverage?
There are many theories regarding this topic, and each has its own opinion about it for different tastes. In other words, there is no holy grail, there is no single truth.

Searching for information on this subject on the web, we found this post that the forum member Imarlo wrote a few years ago in which he comments on Lars Kestner’s formula, which gives an approximation of optimal leverage by dividing the average of the returns of an investment method or a trading system between their variance. If the average increases, the optimal leverage level will increase, and if the volatility (risk measure) increases, the optimal leverage level will decrease.

On the web, in books, or courses/seminars, we can find other approaches to calculate optimal leverage. Others recommend not exceeding leverage of 1:10, others leverage of 1:20. But as I said before, there is no optimal level of leverage. The best level of leverage will be the one with which we are comfortable and that, above all, does not make us decapitalize our account in the blink of an eye, especially in the Forex market.

In summary, leverage can help to obtain more benefits by trading. Still, you have to understand very well how it works and have it controlled at all times because, as we have explained before if we do not have control over it, it is straightforward to reach the point of no account return. This is why it is essential to practice with a demo account.

Exfor provides online trading subscription based access to global markets. Zero commissions, fast orders and ex*****on. Exfor is authorised and regulated by the Labuan Financial Services Authority.

31/01/2023

What is the number one mistake that traders make? 🤓

The question is more complex than it appears because mistakes often happen in pairs and flocks. The traditional culprits are under-capitalization, poor analysis, poor risk management, or even not following a solid strategy. While all of these seem eligible, we think the answer may depend on one thing: a lack of patience.

Read more: https://blog.exfor.com/for-traders/recommendations/what-is-the-number-one-mistake-that-traders-make

30/01/2023

What are technical indicators in trading?

Confused by the colored lines on your trader stock charts? What added value can these wild lines add to your chart analysis? That is precisely what we want to find out in this article.

In technical analysis, these colored lines are technical indicators used to predict the market. Trading indicators are plentiful, with creative traders devising myriad new variations daily. But it is not at all necessary to master all these indicators. However, here are ten technical indicators you should know about.

Technical indicators offer a wide range of possible applications for analyzing market movements and forecasting future price trends. In particular, advanced technical indicators are primarily based on complicated formulas, which you do not need to know.

The role of technical indicators
Technical indicators are often used in chart analysis of stocks, indices, and other securities. There are various types of indicators, most of which relate to price or sales and are formed by calculating price and sales ratios.

Important chart indicators are trend indicators such as the MACD (Moving Average, Convergence/Divergence), oscillators such as the Relative Strength Index (RSI), and course/price channels such as Bollinger Bands.

Technical indicators are used in stock analysis to be able to forecast better future price developments based on probabilities.

Trend indicators like the MACD can be used to show the direction of price movement. Oscillators or momentum indicators are suitable for determining trend strength. The RSI can be used, for example, to assess whether a stock is overbought or oversold and indicates a change in trend.

On the other hand, Bollinger Bands provide information about volatility and are often used to make buying and selling decisions.

Moving averages technical indicators
The moving average is one of the simplest technical indicators derived from prices. There are only two available basic variants, although there are many versions.

The Simple Moving Average (SMA) has historically been popular as a technical indicator because it is easy to calculate without using a computer. Despite the power of powerful charting software, it remains popular and continues to attract traders simply for its simplicity.

The SMA is calculated by adding the average closing prices over a given time period of X price bars or candlesticks. These values are then divided by the corresponding X time period. That’s easy, isn’t it?

The interpretation of the simple moving average
The basic approach of this trend-following indicator is to compare prices against the SMA to capture the market sentiment.

👉 Prices above the moving average → bullish
👉 Prices below the moving average → bearish

You can also look at the slope of the SMA:
👉 The moving average line is sloping up → bullish
👉 The moving average line is sloping down → bearish

By placing the moving average on the price chart, you can use it as a support and resistance level.

The Exponential Moving Average (EMA)
Previously, there was only the Simple Moving Average (SMA) as a technical indicator. But over time, traders were no longer satisfied with this simple indicator, as they often are with simple methods in the long run. So they started experimenting with the SMA. As a result of these thought processes, you then called the original average “simple” to distinguish it from the new complex methods.

Basically, the interpretation of the EMA is the same as that of the SMA. It’s about capturing the interplay between SMA and EMA. Because the exponential average is more responsive to more recent prices, it generates more trading signals from bullish to bearish market action or vice versa.

However, the more signals the moving average produces, the less reliable each signal is. This is an inevitable conflict that occurs with all technical indicators.

Conclusion
Our explanations of the most popular technical indicators help you interpret them correctly and suggest how to combine different indicators to evaluate securities better. Because experienced traders never rely on a single technical indicator but use a combination of complementary indicators to confirm recognized signals in this way.

link to source:

Confused by the colored lines on your trader stock charts? What added value can these wild lines add to your chart analysis? That is precisely what we want to

30/01/2023

How to use trendlines?

One of the most essential tools used in technical analysis for stocks is trendlines. With these markers, you can better understand whether a company is trending up or down in the stock market. Most online brokers allow you to perform chart analysis with trend lines within a few clicks.

Trends can be bullish (increase, uptrend) or bearish (decrease, downtrend). A newer high is formed when a currency pair gets higher than the previous high. A new minimum is formed when the price gets lower than the previous minimum. The higher highs and higher lows mean it is an uptrend. The lower highs and lows point to the downtrend.

👉 link to source:

One of the most essential tools used in technical analysis for stocks is trendlines. With these markers, you can better understand whether a company is

30/01/2023

Risk Management: Trade CFDs Using Leverage Offers

How does leverage trading work? In this article, you are exactly right on this topic! Leverage is offered on almost all assets for private traders. It is all the more essential to find out exactly about the lever. Trading with leverage can have advantages and disadvantages. You will be shown which leverage to use and how to manage the risk appropriately.

The most important facts about trading with leverage:
✔️ The leverage can depend on the financial product, broker, and capital
✔️ Leverage can increase profits
✔️ The leverage can increase the loss
✔️ The broker uses leverage to lend you money so you can trade more significant positions
✔️ The collateral for the “credit” is called the margin.

Leverage can be very risky for the beginner. Again and again, you hear stories of traders who lose a lot of money due to too much leverage.

Trading leverage explanation – What is leverage?
Leverage multiplies the amount used (margin or collateral) on the financial markets. Leverage is typically used when trading derivatives. It is based on any market on which various trading contracts are issued. Trading with leverage works for stocks, currencies (forex), cryptocurrencies, commodities, and many other markets.

In this case, the broker lends you money to trade. The margin is multiplied, and you trade a larger contract size. This is possible due to the broker’s skillful approach. He borrows money from other banks or uses equity to lend it to traders. This allows them to trade larger contract sizes. The broker makes additional profit every day due to an interest rate difference.

Beginners very often ask: which leverage should be used?
Many beginners ask themselves: “What leverage can I use when trading?” When trading with leverage, the amount used (margin) is multiplied. The higher the leverage, the larger the tradable position size.

It always depends on the trading style of the trader. For example, long-term investors don’t need high leverage. On the other hand, fast traders who only trade small movements with large positions need high leverage. There the position size must be higher.

In summary, leverage should suit your trading style. Ultimately, however, the trader still determines his own risk per position size. Leverage doesn’t do much to change that. Leverage does not change risk or danger in trading. It’s up to the dealer himself.

Obligation to make additional payments – Can you go into debt?
There is no longer any obligation to make additional payments for financial products such as Forex and CFDs! However, financial products such as futures and options make it possible to get into debt. Therefore, you should minimize the risk and choose the right product.

In fact, it is possible to incur debt through an over-leveraged position with a broker. This has happened in the past due to extreme market situations. Due to a lack of liquidity, the positions could not be closed or executed.

However, the new regulation means that there is now a restriction. An obligation to make additional payments is no longer possible and has been banned for Forex and CFDs. In addition, there are new security precautions from the providers, so such a scenario is no longer possible.

Trading leverage: The pros and cons for investing
Leverage can have advantages and disadvantages. From our experience, it always depends on the trader’s strategy and attitude. For example, some traders swear by high leverage and only want to use it. Other traders have already lost much money through high leverage and only want to trade without leverage.

✔️ ADVANTAGES
- Trade more capital in the markets
- Higher returns are possible even with small amounts
- Good profits are possible in markets that don’t move much
- More scope for different trading strategies
- Maximizing profit

✘ CONS
- Traders cannot assess the risk
- A broker with too much leverage quickly tempts you to gamble!

Trade leverage with cheap providers
Using leverage automatically increases trading fees. Therefore, you should definitely choose a cheap provider. Calculated over the year, saving on trading fees is extremely worthwhile; the savings can even be several thousand euros.

Remember that broker lends money to the trader through trading leverage. This allows you to move more capital on the financial markets. The position is multiplied by the leverage.

Leverage may incur fees. These fees are called financing fees (swaps). The position is funded, so to speak! A charge applies overnight only. If you hold a position with leverage for several days, this fee can be incurred several times.

For example, the fees due to leverage can also be favorable in forex trading. It depends on the interest rates of the respective currencies that are traded. Leverage can have advantages and disadvantages. However, many traders overestimate excessive leverage.

Conclusion: The advantages outweigh the disadvantages
Trading with leverage has massive benefits for standalone traders. The multiplier allows you to generate higher returns even with small capital. For some markets, you need a multiplier or massive amounts of money to make a profit. For example, these markets only move a few cents daily (forex). For example, if you were to invest €10, it could take years for you to generate a 10% return.

Leverage is a tool that can help the trader to generate more profit. However, it should be used with caution as it can increase risk. The higher the leverage, the larger the contract size can be.

FAQ
What is leverage in trading?
Leverage multiplies your bet amount (margin) in a trading position. The leverage is offered by the broker. Thus, the broker lends you money to trade more significant positions in the market.

What does x1 leverage mean?
Leverage x1 means no leverage is applied. The position is therefore financed directly with your money. For example, if you buy a stock on the stock exchange, you only have leverage of x1. You buy the product for the money.

Is leverage trading dangerous?
Trading with leverage can be dangerous for inexperienced traders. Newcomers tend to use the leverage completely, which often ends in too much risk in the portfolio. It is vital to keep an eye on the risk. Only risk as much money as you can afford to lose.