EarnForex.com Monthly Newsletter
| | | | Hello traders! Welcome to the latest issue of EarnForex.com newsletter — August 2020. In this issue of EarnForex.com newsletter, I will remind you about the most important Forex-related events of the last month and will also show you the list of the site's latest updates. | | EDITORIAL: Predicting vs. Reacting 🤔 | | One odd piece of advice you might encounter when learning about Forex trading is to avoid predicting the market and start reacting to the market. This is a rather strange recommendation as any kind of trading involves predicting the currency rate change, and all good trades involve some kind of analysis (reaction) before making the prediction. Such a distinction between prediction and reaction should be made and must be judged in favor of reaction only when prediction is defined as blindly going long or short without even looking at the charts/fundamentals or when giving 100% probability (certainty) to your expected outcome even after doing some analysis. However, in any case of taking a side in the market, you make a prediction. You may call it a forecast, but it doesn't change much. When you go short or long you expect the rate to go into your direction with a higher probability than in the opposite direction - otherwise why even enter the trade? The thing is a good kind prediction is based on analysis, some statistical model, or your experience as a trader and is probabilistic, while a bad kind of prediction is miscalculated, based on false premises, or is deterministic. And of course, to make a good prediction you need to be reacting to what the market is showing you. This piece of advice can also be understood as waiting for confirmations when trading based on technical analysis — pattern fully forming, trend actually reversing, or getting back to its direction, etc. But this is better formulated as "Don't make premature entries!" rather than "React, not predict!" Anyway, next time someone insists that you react rather than predict the market, ask the person what they really mean and how they trade without predicting anything. | | Overview of the major currency pairs' performance in July | | EUR/USD — was in a straight trend up with only few bearish days. It was at the maximum at 1.1908 on July 31, at its minimum at 1.1184 on July 1, finishing the month at 1.1771. GBP/USD — was growing throughout the month but had a minor correction in the middle of it. The highest monthly rate was at 1.3169 on July 31, while the lowest — at 1.2359 on July 1. GBP/USD finished July trading at 1.3082. USD/JPY — started July with a bit of a sideways market but then fell precipitously; however, the final day was a major recovery for the pair. The pair rose to as high as 108.16 on July 1, reaching a bottom at 104.18 on July 31 and closing the month with the 105.92 rate. AUD/USD — rose in an almost uninterrupted manner. The monthly high was at 0.7227 on July 31, the monthly low — at 0.6876 on July 1. Trading ended at 0.7141 for this currency pair. USD/CAD — went down with only a minor correction in mid-July. The maximum level for this pair was 1.3645 on July 14, while the minimum — 1.3330 on July 28. The month's trading ended at 1.3415 for USD/CAD. | | Fundamental background of the past month | | The US dollar began the month on an optimistic note from the fundamental point of view - improving employment, factory orders, and other indicators, albeit compared to a pretty low base, all suggested strengthening of the US economy. However, the greenback failed to benefit from it, going down on a risk-on market sentiment. The US dollar continued to go down even after a series of disappointing employment and other reports later in July. The euro was in a bullish mode during July thanks to the general risk-on sentiment, optimism about the looming COVID-19 cure, and surprising breakthrough for the Pan-European Recovery Fund initiative. The Great Britain pound also felt great in July. News on the £30 billion stimulus plan and positive changes in the UK economy benefited the sterling. Even Brexit-related worries couldn't trouble the pound last month. The Japanese yen wasn't among the favored currencies on Forex in July, though it fared better than the US dollar. The currency couldn't boast strong fundamentals. Yet, the yen was among the strongest refuge currencies in July. The Australian dollar was strong last month, mostly thanks to the strong domestic and Chinese economic data. Risk-tolerant market sentiment played its huge role too. The Canadian dollar fared very well in July despite oil's subpar performance. The loonie also took advantage of its better-than-expected macroeconomic releases - namely, jobs data, GDP, and retail sales. The Swiss franc was the best-performing safe currency during the month of July. It grew despite expectations for currency intervention by the SNB and even the danger of Switzerland being designated as a currency manipulator by the US Treasury failed to prevent its growth. Gold soared to the record-high price in July, benefiting from all kinds of news - good, bad, and everything in between. Oil was much less lucky than gold last month, going sideways despite a major output taper by the OPEC, which didn't prevent the inventories from remaining high above their average size for this time of the year. | | Interest rate changes in July | | Indonesia | 4.50% | -0.50% | 4.00% | | Malaysia | 2.00% | -0.25% | 1.75% | | Russian Federation | 4.50% | -0.25% | 4.25% | You can see the current interest rates by the world's central banks in our interest rates table. | | No new MetaTrader indicators have been added to EarnForex.com since the last issue of the newsletter, but three indicators received major updates: You can always view the previously uploaded Forex indicators. | | Five new Forex brokers have been added to EarnForex.com since the last issue of the newsletter: - SFEX — a generic offshore Forex broker registered in Saint Vincent and the Grenadines with some rather poorly written texts on their website. They offer MT4 accounts starting from $1,000.
- Skilling — a Forex broker with two subdivisions — one registered in Seychelles, and another one in Cyprus. They offer trading accounts with up to 1:500 leverage and both MT4 and cTrader platforms.
- M4Markets — another offshore broker from Seychelles. They offer MetaTrader 4 as their only trading platform; their minimum account size is just $50.
- Yadix — yet another offshore broker with $20 minimum to start trading, MT4 platform and up to 1:500 maximum leverage. They offer ECN, STP, and rebate accounts.
- streamsfx — a CySEC-regulated company with ECN, Pro, and Classic accounts powered by MetaTrader 4. The minimum account size to start trading is $500.
You can always view our full list of Forex brokers. | | Top five Forex brokers of the last month | | There was the following important Forex industry news since the last issue of the newsletter: - USGFX entered voluntary administration to restructure its business and be able to provide trading services to its customers and also had its ASIC license suspended.
- ForexCT has been taken to court by ASIC for numerous breaches of regulation in regards of ethical and fair treatment of traders.
- ITRADER and 24option had their CySEC licenses withdrawn.
| | Until the next newsletter issue! | | That is all for the August issue of the EarnForex.com newsletter. If you have questions, comments or just want to see something else in the next monthly issue, please let us know. | | |
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