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EarnForex.com Monthly Newsletter
| | | | Welcome to the latest issue of EarnForex.com newsletter — February 2015. 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: Best Protection Against Volatility | | Thousands of traders have been hit by SNB's sudden refusal to uphold its minimum exchange rate of the EUR/CHF currency pair. The event that has occurred on January 15 wiped many accounts despite stop-loss levels that had been set to prevent the disaster. A great deal of those accounts have ended with negative balance (though many brokers have generously compensated negative balances for their traders). Why have stop-loss orders failed to prevent this? The major cause of volatility during such events as that of the EUR/CHF pair last month is a sudden lack of liquidity at some price levels (below 1.2000 in that case). This lack of liquidity results in gaps that you will not even see on a one-minute chart as they occur between ticks. Obviously, your broker cannot execute a stop-loss order that lies inside that gap. So, how does a trader protect oneself from such events? The only way to be protected is to keep the account balance at the level of the maximum loss you can tolerate with the strategy you are using. E.g. if you were long EUR/CHF, the whole account should have been your stop-loss amount (and it really had been that for many traders, unbeknownst to them). This works poorly for scalpers and other short-term traders, but the long-term traders should be ready to embrace such an anti-volatility strategy if they desire to limit their losses during rare market events. | | Overview of the major currency pairs' performance in January | | EUR/USD — continued straight down but stopped for a minor correction during the last week. It was at the maximum at 1.2069 on January 2, at its minimum at 1.1097 on January 26, finishing the month at 1.1284. GBP/USD — did not fall as much as in December but, nevertheless, declined. The highest monthly rate was at 1.5547 on January 2, while the lowest — at 1.4950 on January 23. GBP/USD finished January trading at 1.5062. USD/JPY — fell somewhat, then recovered half of the loss. The pair rose to as high as 120.73 on January 2, reaching a bottom at 115.85 on January 16 and closing the month with the 117.47 rate. EUR/JPY — demonstrated a rapid decline with a small upward movement during the last days of trading. The monthly high was at 145.31 on January 2, the monthly low — at 130.14 on January 26. Trading ended at 132.59 for this currency pair. GBP/JPY — after initial sharp drop, consolidated in a symmetrical triangle. The maximum level for this pair was 187.30 on January 2, while the minimum — 175.72 on January 26. The month's trading ended at 176.84 for GBP/JPY. | | Fundamental background of the past month | | Interest rate changes in January | | Brazil | 11.75% | +0.50% | 12.25% | | Canada | 1.00% | -0.25% | 0.75% | | Denmark | 0.20% | -0.15% | 0.05% | | Republic of India | 9.00% | -0.25% | 8.75% | | Romania | 2.75% | -0.25% | 2.50% | | Russian Federation | 17.00% | -2.00% | 15.00% | | Switzerland | -0.25% | -0.50% | -0.75% | | | Top 5 Forex brokers of the last month | | One new Forex book has been published on EarnForex.com since the last issue of the newsletter: You can always browse the previously uploaded books. | | Three new Forex brokers have been added to EarnForex.com since the last issue of the newsletter: - Tickmill — an offshore company that has took over the retail clients of the Armada Markets broker. The latter has switched to institutional trading only. Tickmill offers MT4 accounts starting with $2 and supports leverage up to 1:500 on currencies.
- FXFINPRO Capital — a regulated ECN broker from Cyprus with MetaTrader 4 platform, $500 minimum account size and nice assortment of trading instruments. In addition to MT4 platform, this company also offers Trader Workstation, ProTrader, and JForex.
- SaudiQuote — a company registered in New Zealand with focus on Islamic traders. It offers two account types: Standard with $10,000 minimum and MT4 and ECN with $100,000 minimum and proprietary SaudiQuote GTX trading platform.
You can always view our full list of Forex brokers. | | One new Forex VPS provider has been added to EarnForex.com since the last issue of the newsletter: - WINNERvps — a Forex VPS with servers in multiple locations with very cheap starting package — $6.99/month.
You can always browse the previously added VPS companies. | | There were the following important Forex industry news since the last issue of the newsletter: - Alpari, Boston Prime FX, LQD Markets, and FXCM have been hit hard by the EUR/CHF floor break induced by the Swiss National Bank. The British division of Alpari and Boston Prime FX have declared formal insolvency, LQD Markets have suspended their operations, while FXCM has managed to receive emergency funding to continue operating.
- Starting January 31, 2015, Forex brokers regulated by NFA can no longer accept deposits via credit cards or via PayPal accounts connected to a credit card. Debit cards are not affected by this restriction.
- NFA decreased the maximum possible leverage for some currency pairs for the regulated US brokers. From January 22, the maximum is: for CHF pairs — 1:20, SEK and NOK pairs — 1:33. From January 26, the maximum is: JPY, AUD — 1:33, RUB — 1:5, BRL — 1:11, MXN — 1:16.
- Armada Markets Forex broker transferred all of its retail customers to new affiliated company — Tickmill to focus on institutional clients.
- ThinkForex is now regulated by the Financial Conduct Authority (UK).
- Two prominent Russian brokers — FOREX MMCIS and Mill Trade officially confirmed their insolvency and bankruptcy citing lack of funds.
- SpediaFX, Boston Merchant Financial, and FX-EDGE became regulated in New Zealand.
- We are happy to announce the launch of a free online bet size calculator for all those spread betting traders in the United Kingdom who need such a tool for their position sizing procedures.
| | Until the next newsletter issue! | | That is all for the February 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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