How to learn to predict exchange rates in the Forex market? How to predict exchange rates How to predict currency growth or decline

Conclusions of classical fundamental analysis:

1. As the economy develops, the currency exchange rate also increases.
2. Economic indicators in the country are falling, and the exchange rate of the national currency is also falling.

The role of news “better/worse than forecast and previous value.”

A constant factor that creates an imbalance and causes movement of exchange rates is important economic and political news, the release of which makes adjustments to the assessments of traders and investors of the state’s economy, and therefore its national currency.

In anticipation of the release of important economic or political news, currency pairs move in the direction of the expected forecast (“rumor trading”).

After the publication of these data, another impulse in the movement of currency pairs occurs:

• if the published data turned out to be better than the forecast, the exchange rate rises;
• The data comes out worse than the forecast - the exchange rate, accordingly, falls under the influence of new factors that the market has received.

Are these elementary truths of the basic Forex training course familiar?

Do you agree?

Do you agree that, working according to these canons of economic science, known to every beginner Forex, Is it possible to make money in this market? Why then do 97% of traders lose rather than make money all over the world, knowing these truisms of economic science?

What is wrong with these “elementary truths” of fundamental trading analysis, leading to the constant loss of Forex traders?

Masterforex-V about the factors causing the growth/fall of currencies in the world:

• Not a single theory that is considered correct by 97% of its participants can work on the stock exchange, because these 97% are obliged...to lose;
• if 97% believe the classic thesis about the balance of supply and demand as a factor in changes in exchange rates to be correct, this theory should become unprofitable and incorrect for the trader (or its interpretation in the form of quotes should take a path on which 97% of traders are bound to lose);
• accordingly, the thesis “All economists share these fundamental principles” ( Thomas R. Demark) acquires (according to the MF algorithm of predators and preys) a completely opposite meaning - “victims” always believe the “fundamental principles” of the state and the economy, especially when they are adhered to by “all” (!) leading economists in the world, including DeMark;
• a partial answer to this problem of the connection between the balance of supply and demand and the “divorce of the crowd” was given in the form of a colorful form (not an algorithm), who wrote that quotes on Forex and fundamental analysis are “tied with a rope a mile long. Ultimately, the foundation determines. But before the “final score” anything can happen”;
• gave a second clue , pointing out the pattern of differences between the thinking of an experienced professional trader (level 3 according to his classification of trader skill “Trading Chaos 2”) from a beginner:

  Once you reach Level 3, you become a fully self-sufficient professional trader. (I would say “self-sufficient” - editor’s note). You are always aware of the underlying and usually invisible structure of markets. You no longer need to seek other people's opinions. You don't have to read , watch market shows on TV, subscribe to newsletters or spend money on news channels.

Comments Masterforex-V.

From the statement Bill Williams The reverse train of thought also logically follows - in order to become a successful professional trader, go to the movement algorithm, and not to read various analytical reviews and recommendations that come from the pages of both Wall Street and “home-grown” gurus in the guise of analysts of various Dealing Centers and brokerage companies that will always “correctly” explain in history “why and what happened”...

To understand the value of such “analysts” and “experienced traders”, think about why, during the global crisis, their bosses dismiss them en masse, and who (bartenders) these people, who just yesterday explained to the whole world how to read quotes correctly and correctly, will retrain as.

When is the next time you come across an “economically correct” stock review? analystsForex without clear algorithms, calculations and... think about bartenders.

An example of how fundamental analysis is worked out during the “divorce” of a large crowd of “victims”.

Let's consider the MF algorithm of Elder's colorful form about the connection between fundamental analysis and current Forex quotes “a mile long”, during which “anything can happen”.

Rice. 1.2.1. Pound/dollar, 04/01/2005, m5.

1) news is better than the forecast and the previous value for the UK economy:

• The CIPS manufacturing index in the UK for March was 52.0 (previous value revised from 51.8 to 51.6);
• London Stock Exchange Footsie 100 Index () increased by 19.60 points (+0.40%) to the level of 4914.00.

2) all the news on the US economy came out worse than the forecast and the previous value:

• The price of oil in New York rose by $2.40 to a new 21-year high of $57.70 per barrel;
• The number of new jobs (Nonfarm payrolls) in the US in March became the lowest since July last year, worse than the forecast and the previous value, revised downwards (+110 thousand with a forecast of +225 thousand, previous value +243 thousand);
• The Michigan sentiment index in the US fell - for March it was 92.6 (the forecast was 92.9, the previous value was 92.9);
• All US indices fell. The Dow Jones Index of the New York Stock Exchange fell by 99.46 points (-0.95%) and closed at 10404.30. The Nasdaq index fell by 14.42 points (-0.72%) and is at the level of 1984.81. The S&P 500 Index () fell by 7.67 points (-0.65%) and is at the level of 1172.92;
• The yield on 30-year US government bonds is 4.729 (down 0.037 from the previous close). And the London Stock Exchange index Footsie 100 () increased by 19.60 points (+0.40%) and is at the level of 4914.00.

Now a question for certified economists: what will happen to the pound/dollar currency pair if all this data is released within one day, or rather several hours, on a free and uncontrolled market? That's right, the dollar must not just fall, it must collapse. Powerful, fast.

What happened in the end can be seen in the graph m5 (above) and m30:

• on the news 05/1/2005 The dollar first fell powerfully (GBPUSD rose), capturing buy-stops at the top;
• then hit the sell stops below (below the bottom of the daily candle).

Rice. 1.2.2. Pound/dollar, 04/01/2005, m30.

Synthesis of TF (time frames) of SHORT-TERM, MEDIUM-TERM and LONG-TERM GBPUSD trends.

Rice. 1.2.3. Pound/dollar, h4

Rice. n4 and d1, w1 GBPUSD (in the figure the day is 04/1/2005):

• The pound continued to fall for 4 days and hit a new low after low three times. Punched and rose to flat;
• the exit from the flat on the MEDIUM-term trend h4... was up;
• The pound/dollar grew for 3 weeks (“working off” the terrifying news on the US economy) and passed only 240 points in 3 weeks.

Rice. 1.2.4. Pound/dollar, D1.

From the point of view of the LONG-term trend w1 GBPUSD, all this upward movement... turned out to be a bullish correction, after which the US dollar continued to rise for six months (GBPUSD to fall), although data on the US economy became worse and worse.

Rice. 1.2.5. Pound/dollar, W1.

Do you see the algorithm?

He exists... but he is absolutely not the one that the “crowd” sees!

What would be confirmation for you?

In the pictures there are more than a dozen new hints from the synthesis of binary patterns of MF, why in this situation it was possible to open “short” trades (short transactions in MF terminology - unlike the classics - this is not a sell, but a pipsing, transactions with mandatory closure at the peak, because +1 stops are necessarily demolished during a rollback).

If the algorithm is not clear, stop working on Forex.

Detailed tactics for working on Forex within a day according to the SHORT-TERM trend we will consider in a separate chapter.

How do analysts explain such movements (of course, in hindsight, after the end of the movement)?

We read and try to understand the analysts’ logic:

Despite the release of data significantly worse than the forecast and the previous value, investors (?) believed (??) that the fall of the dollar was worked out (?) by the previous movement and taken into account (??) by the market.

• How could a currency work on April 1, 2005, if it just stood there throughout the European session, floating in a very narrow price range?
• Why didn’t any of the analysts warn before the news release that the dollar’s ​​fall had already been “worked out”?
• If the market processed this news BEFORE its release, why did the movement begin with the fall of the dollar?

Traders (??) were waiting for newseven worse for the US economy than they came out with.

• And how, interestingly, is EVEN worse if, according to Dow Jones analysts, the moving average of new jobs in the US is 180 thousand, but it turned out to be +110 thousand, with the forecast of +225 thousand. and the previous value +243 thousand?
• And how do these economists count traders: by heads, countries or lost amounts of all those who left Bai’s trades up, sacredly believing all sorts of academic publications, authors known to the whole world, that currency tied to economic statistics of their countries?

• you should absolutely not care what these analysts write in reviews of Dealing Centers and brokerage companiesForex;
• remember the bartenders... and everything will become clear to a sane person;

Masterforex-V algorithm of a trader’s work when news is released.

1. News is always processed by the “market”:

• if the news came out worse than forecast, a bearish movement is mandatory,
• if the news came out better than forecast, there is definitely a bullish movement.

Rice. 1.2.6. Processing of news by the market.

2. According to the MF algorithm, the “divorce of victims” (“crowds of traders”) is what the wave of “working out” the news vector will become:

• impulse (see materials from grade 11 of the School for Beginning Traders),
• the last sub-wave of the SENIOR TF impulse,
• correction... with the continuation of the current trend after the market has processed the “released news”.

3. The most difficult thing in this situation is the synthesis of TF(SHORT-TERM, MEDIUM-TERM, LONG-TERM):

• SHORT-TERM (m1-30), MIDDLE-TERM (n1-8), LONG-TERM (d1, w1, MN) - optimization of Elder’s “3 screens” MF;
• Accordingly, news processing can be an impulse/correction of many options 8 .

Rice. 1.2.7. Correction and reversal of the senior TF (wave B and C up).

Rice. 1.2.8. 5th sub-wave and reversal of the senior TF.

Rice. 1.2.9. 3rd wave down (1st in 3rd, 2nd in 3rd, 3rd in 3rd).

4. How to define the “working out” of news as an impulse/correction of a certain TF.

Instead of 3 Elder screens, in TS MF there are 8 screens that allow you to:

• firstly, online accurately determine the wave level of the current wave (m1, m5, m30, n1, n4, d1...);
• secondly, add these waves together, as in the children's game “Constructor”, following the market, and not predicting it.

5. In a managed market F orex no random movements(“market noise”), every movement is natural(even on a tick chart and m1).

6. News is just a reason to drive currency pairs within the framework of SHORT and MEDIUM term trends.

Strong/weak/reverse movement on news occurs not because of the figures of published news, but because of a “random” coincidence/discrepancy of the current technical analysis with the vector of published news.

7. Understanding this MF algorithm(which none of the trading classics have), you can clearly see:

• critical points of strong movement;
• options for strong/weak/reverse movement on news (regardless of published news figures).

On the closed forum of the Masterforex-V Academy since 2005. This technique is used daily, allowing you not to look at news sites when news comes out (if “price takes everything into account,” what difference does it make what numbers are published?).

Drawings of the Masterforex-V algorithm when Forex news is released.

Rice. 1.2.10. Practicing news as an impulse.

Rice. 1.2.11. Processing the news as the last sub-wave of the SENIOR TF impulse.

Rice. 1.2.12. Processing the news as a correction, with the continuation of the current trend after the market has processed the “released news”.

Examples of the use of MF algorithms in news releases.

Example - 06/29/2006 on the news about the interest rate in the USA - a trend reversal on d1.

For supporters of fundamental analysis, I remind you that on June 29, 2006, the interest rate in the United States was raised.

The American dollar, instead of rapidly strengthening (according to the “fundamental principles” of fundamental analysis and economic science) ... collapsed.

Rice. 1.2.13. The “market” reaction to the news = a powerful impulse in the form of Elder’s Hound of the Baskervilles/Masterforex-V.

Rice. 1.2.14. The “market” reaction to the news = a powerful impulse in the form of Elder’s Hound of the Baskervilles/Masterforex-V.

2. The “market” reaction to the news = the last sub-wave of the impulse followed by a reversal:

• SHORT-TERM and MIDDLE-TERM correction (as in the example of April 1, 2005, the development of correctional wave B and the next 3 weeks to process the terrifying news on the US economy);
• MEDIUM term (breaking through the base of wave n4).

Rice. 1.2.15. The “market” reaction to the news = the last sub-wave of the impulse followed by a reversal.

Rice. 1.2.16. The “market” reaction to the news = the last sub-wave of the impulse followed by a reversal.

news processing = last subwave m5/15 (C) of wave A n4;

• breaking through the bottom (for Academy students, the criteria for closing buys through new MF instruments is much higher) = end of wave A n4;
• downward movement (“moment of truth” n4) = wave B n4 (consisting of the correction model a-b-c m30/n1);
• failure to break through the base of h4 + upward reversal = wave C of h4;
• for a LONG-term trend, all bullish movement = correction in d1.

For examples, see Chapter 19 of Book 2 of the MF, including the example of an increase in the interest rate by the Bank of England on May 10, 2007. by 0.25%.

GBPUSD completed the correction (50 p) and fell further downward along the current bearish MEDIUM-term trend against all dogmas and “fundamental principles of economic science” (Demark).

Rice. 1.2.17. The “market” reaction to the news = trend correction... with the continuation of the current trend after the market has processed the “released news”.

The role of news in the managed Forex market:

• news is a reason to work out an impulse or correct one of the 8 TFs;
• every movement on Forex is naturally calculated and put together online through the new technical and wave analysis of Masterforex-V;
• whether by accident or not, the Forex “market” weaves a “lace” of currency quotes, in which each movement is logical and a small TF is a development (including through news) of waves, sub-waves, Fibonacci, Murray levels, orders of the exchange and non-exchange Forex market of larger TFs;
• this is a random daily coincidence of the balance of supply and demand of market participants or an algorithm of a worldwide over-bank and over-exchange computer program in a managed Forex market.

All this will be discussed in the next chapter of the book.

How a trader should always “follow the market” after news releases.

1. Solve on your own the unsolved riddle of the classics of wave analysis of trading:

• how to determine the wave level of the current wave (m1 ... m5 ... m15 ... n1... n4) online;
• how to determine the end of the current wave and the beginning of a wave in the opposite direction (accordingly, its wave level);
• further - access to the classical models of impulse and correction (see 11th grade), embedded in the settings of the computer program of the Forex “market” Organizer.

2. Add waves, clearly knowing:

• criteria for distinguishing an impulse from a correction;
• wave level of correction/impulse (an unsolved mystery of the classics, resolved in the TS MF);
• practicing sub-waves on a smaller time frame before and after news releases.

3. Based on the above MF algorithm, determine the critical points of reversal or continuation of the trend of the TF clearly defined by you:

• what will be confirmation of a reversal or continuation of the trend when “processing the news”;
• how will you calculate resistance/support levels for each of the 3 options for moving the algorithm;
• where it is necessary to place a stop (the activation of the stop is a transition to an alternative version of the movement of the SENIOR TF).

4. What is the role (as hints) of binary patterns of MF outside the wave analysis of trading:

• allies;
• national currency indices;
• exchange market orders;
• warrants for “Oanda victims”;
• exchange instruments (oil, gold, indices);
• classical tools of technical analysis of trading - moving averages, fractals, AO, Fibonacci, Murray, DeMark levels;
• new tools for technical analysis of trading - MSF, FZR, pivots MF, NK MF, Hound of the Baskervilles Elder/MF, MF zones, pro traps of Larry Williams/MF, wave levels MF, 8 screens, TF synthesis, etc.

5. MF methodology for searching useful information in analytical reviews.

6. Tips for independently accessing the Masterforex-V algorithm to work on news- see Masterforex-V Academy level on fundamental analysis (FA) - list of questions and materials studied at the Academy (not studied by any FA specialist in the world except Masterforex-V Academy) - see 12 MF discoveries in the field of fundamental market analysis .

When you use this MF algorithm, the Forex axioms will open from a completely different angle:

Book 3. Points of opening and closing transactions on the Forex market (basic rate) >>>

Anyone who wants to make money in the investment markets needs a certain knowledge base. And no matter what assets he chooses to trade, an understanding of transactions with the EUR-USD (euro/dollar) currency pair is mandatory. This is one of the most famous and controversial pairs for trading binary options (BO). For those who seriously intend to start their trading journey with Eurobucks (slang name for EUR/USD), it will be useful to know everything about it. By the way, about 30% of all currency exchange transactions in the Forex market occur in this pair. It represents the two largest economies in the world.

Reasons for the popularity of EUR/USD

It is worth noting that the Eurodollar is popular not only in. This pair basically includes the two most popular and liquid currencies in the world. Another important feature of EUR/USD is predictability. As a rule, it is not too difficult to predict the reaction of the exchange rate of these monetary units to key economic news from the US and EU. There are other reasons for the asset's popularity, including:

• a large amount of news and analytics, both on the currencies themselves and on the countries they represent
• high liquidity
• optimal volatility, suitable for both beginners and professionals (the rate of change in quotes depends on the time of day);
• quotes change in accordance with the rules of technical analysis
• prevalence (every BO broker has this pair without exception)
• trust (many Russians keep their savings in these currencies)

Beginners often start working with binary options with this asset. They can be understood, since in terms of information availability it is the most accessible. Open the news feed of any country, and there will definitely be something about the EU and the USA. These states make news, their every move is watched by the entire planet. In the world's news agencies, more than half of the news feed is devoted to them. For a novice trader, working on this pair is a good opportunity to understand the principles of investing.

Features of changing pair quotes

Here the euro acts as the base currency, that is, the quote gives us an idea of ​​how many dollars should be spent to buy 1 euro. In terms of exchange rate changes, Eurobucks are classified as trending assets. This means that the value of the euro, expressed in dollars, moves within an upward or downward trend. In the long term, quotes are seriously influenced by so-called fundamental analysis factors. Among them are the state of the EU and US economies, the publication of final statistical data, and key economic decisions of the leadership of these countries.

Eurobucks has a gold level. Since the base currency is the euro, it is determined by the most acceptable price for EU countries. In general, this is 1.3425, but in economically difficult times (for example, such as now), it may have other indicators. At the moment the gold quote is 1.3200.

It is necessary to take into account that the EUR/USD rate often lingers at levels that end in 00 or 50. In addition, in most cases it moves in a long-term trend. If you choose options with a short expiration period, then you should rely on the rules of technical analysis, and for long-term transactions you should also take into account the rules of fundamental analysis.

Main factors influencing EUR/USD

The Eurobuck exchange rate is seriously influenced by the financial policy of the United States. It includes the following tools:

• conducting foreign exchange transactions on the market
• adjustment of the discount rate level
• change in reserve requirements indicators

The Federal Reserve System (FRS) makes decisions on the discount rate and reserve conditions. Market movements are the responsibility of the Federal Open Market Committee (FOMC). Since the dollar is a reserve currency for many countries around the world, any decisions of these structures have a direct impact not only on US finances, but also on the global economy as a whole.

Foreign exchange transactions on the market

We are talking about the purchase and sale by the United States Central Bank of money and other assets on the open market. This is done to increase or decrease funds in the country's economy, based on current needs. The FOMC periodically reviews the financial situation and then decides on further actions at a special meeting. After such meetings, the EUR/USD exchange rate often changes depending on whether decisions were made positive for the dollar or not.

Discount rate

This is one of the key indicators of economic development of any country. The discount rate is a formal indicator showing at what percentage the country’s Central Bank is ready to provide loans to commercial banks. Its change does not directly affect the foreign exchange market, but it shows the direction of development of US economic policy.

Reserve requirements

There is also the Federal Reserve's federal funds rate, which determines the interest rate at which daily loans will be issued. A change in this indicator is a signal of new approaches to financial policy; accordingly, its impact on exchange rates is significant.
In addition, the couple we are interested in is seriously influenced by the following factors:

• issuance of 10-year Treasury bonds;
• rates on 3-month Eurodollar deposits (these are deposits in dollars outside the United States);
• change in the difference between the refinancing rate of the European Central Bank (ECB) and the same indicator in the United States;
• rates on 3-month “Eurodeposits”;
• issuance of 10-year Government Bonds;
• publication of key economic results of the United States and any EU country;
• changes in the consumer price index, trade balance, gross product of these countries and other indicators;
• serious political decisions and events concerning the EU and the USA.

The political aspect in the formation of EUR/USD quotes is so interesting and important that it should be given maximum attention. You can verify this by studying the history of the Eurobucks.

The difficult history of the couple's relationship

The idea of ​​​​creating a single currency in Europe was fixed in 1992 by the provisions of the Maastricht Treaty, signed by 12 EU states. And since 1999, the euro was introduced into circulation for use exclusively for non-cash payments. Since its creation, this monetary unit has become, in fact, the main rival of the American dollar. Immediately after its introduction, the euro began to lose ground against the dollar, since at that time the united European troops were establishing a new order in Yugoslavia, while the situation in the United States remained stable. But in 2001, due to the September 11 terrorist attacks, the American currency began to depreciate and the euro strengthened.

In July 2002, the EUR and USD rates were almost equal. Then the first conversations began that the era of dollar dominance was coming to an end. The war in Iraq started by the Americans also did not contribute to the strengthening of the national currency, which benefited the euro. Despite the fact that the economies of the EU countries did not show much growth, the exchange rate of the united Europe’s currency grew due to the weakening of its overseas rival. But a few years later, serious problems began in the European Union. Since 2009, high-profile events have periodically occurred in the association, which invariably contribute to the depreciation of the euro, including:

In addition, today the European Union has a so-called quantitative easing program, which in fact represents the active operation of a machine that prints euros. This also contributes to the devaluation of the EU currency.

To learn how to predict movements in EUR/USD quotes, you need to accept the fact that these currencies are antagonists. Strengthening one of them leads to weakening of the other and vice versa.

Historical minimum and maximum

The historical minimum for the pair was observed at the dawn of the creation of the euro, in October 2000 and amounted to 0.8200. The pair reached its historical maximum in July 2008 at the height of a powerful economic crisis. Then it was 1.6050 points. From the time the pair reached its historical maximum until the current moment, the graph of its quotes has formed a descending triangle. All subsequent maximums are invariably less than the previous ones. At the same time, the minimums remain approximately at the same level.

Eurobucks predictability

One of the main advantages of the EUR/USD pair is that its quotes move in accordance with fundamental and technical analysis. It is quite easy to predict down to specific dates. Eurobax is sensitive to significant economic events in the US and EU, which are often predetermined. These are speeches by country leaders and authoritative organizations, publication of important reports, meetings and conferences on key economic issues, and the like. If you analyze how the euro and dollar exchange rates changed as a result of various events, then with a high degree of probability you will be able to predict them in the future.

As for short-term transactions, the differences here can be significant, since this pair has periods of high volatility. For options with expiration dates from several minutes to several hours, you must rely on the rules of technical analysis. It is advisable to use support and resistance levels, Fibonacci lines, as well as various indicators.

It must be taken into account that the advantage of EUR/USD in the presence of a huge amount of information is at the same time its disadvantage. All diverse and diverse news must be studied, analyzed and compared with each other. It is difficult for an inexperienced person to understand what will have a greater impact on the exchange rate, a certain political event or a statement by the head of the Central Bank. Especially if messages about them came out at the same time. Therefore, many experts do not recommend this pair as the first asset for beginners.

Pair volatility

Eurobax is considered an asset with medium volatility. During the day, its quotes can change on average within 100-150 points. However, if serious and resonant events are on the agenda, then fluctuations can reach 200-250 points. The more players in the market trading the euro and dollar, the more actively the EUR/USD quotes jump.

The highest trading volumes are expected to be observed during the European and American sessions. The period of their intersection is the time of the greatest volatility of the pair. It is extremely difficult to predict its movement within this interval, which is why experienced traders do not trade at this time. Eurobucks quotes behave calmest during the Asian and Australian sessions. At this time, few people trade such options either, since volatility is low. Also, the mobility of quotes increases at the start of the European session, from 9 to 11 o’clock and at the beginning of the American session from 16 to 20 o’clock Moscow time.

Couples are Eurobucks companions

Many currency pairs exhibit mutual correlation. This means that their quotes change in a direct or inverse relationship. EUR/USD has the most obvious direct correlation with GBP/USD. And this is not surprising, since Germany is the leading EU country and its economy is the most powerful in the union. The quotes of these pairs change almost synchronously. Also, AUD/USD, NZD/USD and other pairs where the dollar is not the base currency directly correlate with the Eurobuck. This is explained by the presence of a common currency for all these assets. As soon as the American unit begins to strengthen or weaken, this fact will be reflected in the quotes of all pairs.

EUR/USD has a very strong inverse correlation with USD/CHF. They move synchronously, but in different directions. The inverse relationship with USD/JPY, USD/CAD and other similar pairs where the dollar is the base currency is less pronounced.

• Constantly monitor current news about the EU and the USA, be able to interpret them correctly
• be aware of the time of all events for making important economic decisions (meetings of the Federal Reserve Board, FOMC meetings, etc.)
• monitor such events and be able to draw conclusions based on their results
• keep abreast of key economic indicators of the US and EU, as well as monitor their changes
• have an understanding of the functioning of the world's leading economies and know about the key factors influencing exchange rates
• know how other countries can influence the exchange rate and follow high-profile world news
• master the standards of technical analysis for short-term trading

In addition, it is necessary to select the optimal trading time taking into account daily fluctuations in volatility and develop. At the same time, you can and should use various tools that will make your work easier. These could be indicators or support/resistance levels.
If you are really interested in what is happening in the most developed countries of the world, and you are ready to devote a lot of time to their comprehensive study, then the euro/dollar pair is for you. It is not without reason that it is so popular and accounts for a third of transactions on the Forex market. EUR/USD has average volatility, good predictability (with appropriate analytical work), and wide distribution. But, unfortunately, it is not suitable for the first steps in the field of binary options without deep knowledge of the subject.

Abroad, the movement of the ruble against the dollar and euro in practice raises a lot of questions. “Determining what factors influence the exchange rate is not always easy, since there are a lot of them, and they all act simultaneously,” explains Oleg Zamulin, dean of the Faculty of Economic Sciences at the Higher School of Economics. “That is why it is difficult to predict the exchange rate even in theory.” Let's try to figure out the main points.

In our country, the so-called “floating exchange rate regime” has been in effect since 2014. This means that the state does not fix the price of currencies that can be bought for rubles and does not directly influence the process of exchange rate formation. Theoretically, if a critical situation arises in the foreign exchange market, the Central Bank of Russia can intervene (intervene) - but in recent years such measures have not been used even once. In other words, the state seeks to control the rise in prices for goods and services (this is called “inflation targeting”), but at the same time believes that exchange rates should be regulated exclusively by the market.

The market rate of the Russian national currency in relation to all others is determined during the trading process on the currency exchange. Someone wants to sell, someone wants to buy it, supply and demand are constantly changing. Every day, based on the market rate, the Central Bank at 11.30 Moscow time fixes the official ruble exchange rate, and it comes into effect from the next day.

The ruble exchange rate is primarily influenced by two factors: capital flows between different countries and the price of oil. “If investors want to invest money in Russia, then they have a demand for rubles, and accordingly, the ruble becomes more expensive in the market,” explains Oleg Zamulin. - And if everything happens the other way around, or, for example, if Russian companies withdraw capital abroad, then they show demand for dollars and euros. Thus, the ruble is becoming cheaper.”

It is also worth keeping a close eye on the price of oil. If it rises, then Russia's currency is on its exports. Oil companies that have earned these dollars begin to sell them on the market for rubles - which means that the demand for them increases and the ruble exchange rate strengthens. Accordingly, when the world price of oil falls, all processes go in reverse order.

“Another important factor in the formation of the exchange rate is inflation,” continues the expert. - If in Russia it is higher than abroad, then no one wants to keep funds in that currency. People transfer their savings, for example, into dollars, creating demand for them, and as a result, the ruble depreciates against foreign currencies.”

In addition, the exchange rate can be affected by various economic sanctions (as happened quite recently), an increase or decrease in the growth of the Russian economy, the course of monetary policy of other countries, and so on. Perhaps, in order to add up and analyze all the factors, it is not enough to be the holder of special diplomas - it is worth developing in yourself such a non-obvious quality as “financial instinct”.

Sell ​​or buy?

The actions of the Central Bank of Russia, one way or another, may influence how much the currency will cost. But its experts never give forecasts for tomorrow, next week or month. But in the media and social networks it is easy to find a lot of other “predictions” - from the rosy to the most catastrophic. “Remember this tweet” - the phrase of one of the bloggers, who in 2015, at the time of the exchange rate collapse, said that he was exchanging all his dollars for rubles, became a meme. To believe or not to believe, buy currency, sell or leave everything as is is always a personal choice, which carries risks and will affect your wallet one way or another.

In this sense, the current situation with exchange rates is no different from all previous ones. What is worth remembering when you need to make a decision?

1. Always plan operational expenses - current and medium-term. Purchases, trips, tuition fees - it is better to keep these amounts in the currency in which you are going to spend them in the foreseeable future.

2. “Don't put all your eggs in one basket” is a golden financial rule for those who care about their savings. In general, it will be safer to distribute money across several types of deposits, banks or currencies: if something happens to one “basket”, the rest can compensate for the shock. For example, many banks offer multi-currency deposits, where you can distribute money among several accounts: in rubles, dollars, euros, etc.

3. Do not be tempted to make money on differences in exchange rates if the money is “last”. The expression “playing on the stock exchange” did not arise by chance - risky entertainment can easily lead to losing everything.

4. Don’t panic, analyze the situation, listen to the experts you trust, but most of all, yourself. The better you understand what is happening in the country and in the world, the more real knowledge you receive, the less the risk of being a powerless hostage to the economic situation. It is always better to manage your money consciously. And remember that this is not a one-time “case”, but an ongoing process.

Play or work? What is trading to you? If you want to know how to predict binary options, you don’t consider yourself a gambler. Are we right? If so, then we have good news. You can achieve stable income from BO. Of course, if you put in enough effort for it.

The main task of a trader is to learn to analyze and predict the market. Today we will show you how to do this. Let us briefly tell you what analysis methods exist, where you can learn them, and what additional services you can use.

Binary options forecasting options

There are 2 main categories of market analysis: fundamental and technical. The first is based on the analysis of various macroeconomic, political and other news. Technical analysis is working with a chart. The technical analysis itself is divided into 3 categories:

• Indicator (computer).

It is sometimes referred to as a separate type of analysis. However, this is not so important. As you understand, this analysis is based on working with technical indicators. Oscillators, trend tools and volume indicators can really help in trading.

There's just one problem. Often, novice investors overestimate the importance and accuracy of indicators. Remember that this is a supporting tool. If Stochastic shows that an asset is in the overbought zone, this does not mean that the price will immediately begin to fall. Likewise, the intersection of moving averages does not mean that a trend reversal will occur.

Indicators are great helpers. When you learn to use them correctly, you will be able to accurately predict exchange rates on binary options.

• Candlestick.

When we looked at non-indicator strategies for BO, we told what its peculiarity is and what candles and their combinations a trader needs to remember.

In a nutshell, this type of analysis is based on the study of candles. When we first saw the graph, we noticed nothing but chaos. Now, in the appearance of one or several bars, we can see a signal for a reversal or continuation of the trend. And often these signals work.

• Graphic.

The most difficult version of technical analysis for beginners. Correctly drawing various lines and levels on the chart can also indicate the strength and direction of the trend, the possible moment of reversal, trend resumption, the beginning and end of the correction and many other important points that need to be found for successful forecasting.

The simplest way to work with graphical analysis is to build trend lines.

However, there are also Fibonacci levels, pitchforks, circles and other tools. There are plenty of videos and articles on the Internet on the use and effectiveness of each of them. If you decide to engage in graphical market analysis, it is not necessary to know the features of each instrument. But trend lines won’t get you very far. Therefore, you will not be able to master this method of market forecasting in 2 days. However, there is nothing super complicated here.

Online binary options forecasting

You can forecast the market using a chart using trading terminals such as MetaTrader 4 and 5. However, there are also online charts. Firstly, this is the broker's platform. Not every company provides a high-quality market analysis tool. However, there are also successful exceptions. Here is a list of some brokers that allow you to conduct detailed market analysis directly on your chart:

• . There is no need for an extended schedule here. The brokerage platform is one of the most functional. The only negative is that it has not been available to Russian traders since 2016.

• . Another original tool for market analysis. Dozens of indicators, a convenient chart and a simple panel will allow you to analyze the market comfortably.

We also note Utrader and Finmax. Their standard platforms are not very functional. But the site has advanced TradingView charts. A few words about this tool below.

TradingView Chart Features

A live chart from TradingView with a full set of functions is available only on the company’s website and by paying for a subscription. But in most cases, you can get by with the free version, which can be installed on any website. As we have already noted, some brokers offer this tool. Go to Utrader or Finmax to see for yourself.

Let's remember the main charting features available to everyone.

1. A huge number of assets, including major, cross-rate and exotic currency pairs, cryptocurrencies, stocks, futures, indices.
2. 11 types of displaying price movement. In addition to the standard line, candles and bars, these are Heikin Ashi, Renko, Kagi, Tic-Tac-Toe and others.
3. Dozens of indicators for technical and financial analysis. You haven't even heard of many of them. And to be honest, so do we.
4. A variety of graphical analysis tools. Lines, several types of lines and villas, Gann and Fibonacci tools, etc.

TradingView chart is a very useful tool for a trader. The monthly subscription is not very cheap. But you won't need it just yet. By the way, we will definitely add it to our website soon. So stay tuned for updates.

Auxiliary service for forecasting

It is very difficult for a beginner to immediately understand how to predict binary options. Therefore, the help will definitely not be superfluous. Today we will talk about a service that can really help with this.

Now we could talk about Autochartist and some other useful services. But their main disadvantage is that basic information is available only after payment. We will tell you about free services.

Investing

The information portal Investing.com offers a wealth of information to speculators. Latest economic news, analytics from leading experts, economic calendar and much more.

The site offers the following main sections:

• News. Divided into several categories. To make forecasts, we first look at important events in the world of finance;
• Analytics on currencies, stocks, bonds;
• Technical analysis. Signals based on several dozen indicators, turning points for many assets, information, information updated in real time on the formation of candlestick patterns on the chart;
• Charts. Everything is clear here. Investing provides interactive charts for almost every tradable asset;
• Tools. Here you will find economic and other types of calendars, as well as a Fibonacci calculator and other tools.

There are also sections “Traders”, “Brokers” and “Investment Portfolio”, but they are not very useful for forecasting binary options.

Market analysis is a difficult and painstaking task. It is very difficult to compile the most accurate version of the movement of quotes in a minute. Therefore, we will give one final piece of advice. Don't try to analyze the chart too short term, especially 1-5-15 minutes. This is almost impossible, especially if you are a beginner.

Give preference to medium-term trading and improve your binary options forecasting skills. Then profits will definitely appear and will only increase over time.

In 2011, the KNORUS publishing house and the Center for Research of Payment Systems and Settlement published the book by V. G. Bryukov “How to predict the dollar exchange rate. Effective forecasting methods using Excel and EViews." Unfortunately, not all readers - also due to the relatively high cost of the printed version of this book - were able to purchase it, as their letters indicate. In this regard, the author of these lines decided to publish this book a second time in electronic form, including in the second edition an additional paragraph about structural changes in the dynamics of the dollar-ruble exchange rate that occurred in 2014-2015. In addition, whoever wants to get acquainted with my latest developments on this matter in more detail can purchase another of my recently published books - “How to predict the dollar exchange rate. Calculations in Excel to reduce the risk of loss."

Preface to the first edition

What will the US dollar exchange rate be tomorrow, the day after tomorrow, in a week or in a month? How much will the single European currency, Japanese yen, British pound, Swiss franc, Canadian, Australian or New Zealand dollar and other currencies be worth in the near future? Does it make sense today (tomorrow, the day after tomorrow or in a month) to invest Russian rubles in US dollars, euros, pound, or yen, or, on the contrary, do you need to get rid of foreign currency as soon as possible? What recommended buying or selling courses should you follow?..

We live in a time when millions of ordinary investors and professional traders around the world, including in Russia, have to search for answers to these burning questions every day. And this is quite understandable, since their future well-being depends on the correct answers to these pressing questions.

In our opinion, and we would like to hope that the reader will agree with this: those who take the trouble to carefully read, or even better, study this book, will be able to give more competent answers to these burning questions.

Consequently, our book is intended for all those who are interested in the foreign exchange market, who are going to make money or are already making money in this market, and for all those who want to learn how to make forecasts on exchange rates. However, this book will be useful and interesting not only for currency investors and traders, but also for students whose future profession, one way or another, is connected with working in a bank, financial company, or with operations in financial and commodity markets. Moreover, the knowledge gained in this book will be useful not only for working in the foreign exchange market, but also for working in other commodity and financial markets, since the methodology for forecasting exchange rates is not fundamentally different from forecasting prices, for example, for goods such as oil or gold.

The book describes in detail the methods for constructing stationary and non-stationary statistical models for forecasting the US dollar exchange rate using EViews and Excel programs.

In this case, particular attention is paid to the development of forecasting models for the US dollar exchange rate with a one-month lead time. After mastering this material, the final chapter 7 provides statistical models for forecasting the dollar exchange rate with a lead time of two weeks and a lead time of one week, as well as for forecasting the euro/dollar exchange rate with a lead time of one day. This final chapter also describes the methodology for compiling recommended purchase and sale prices for currencies based on the developed statistical models. Moreover, the effectiveness of these prices is examined using specific examples, taking into account the latest market data.

Obviously, in addition to forecasts for the American currency and the single European currency, many would like to learn how to make forecasts for the rates of other currencies, for example, the yen, pound sterling, Australian dollar... And this list of currencies interesting for investors can be expanded, at least for another two dozen monetary units.

In this connection, it is necessary to note: having carefully read and mastered the material in our book, the reader can later cope with this task quite independently. Because the basis for making forecasts for the rates of various currencies is the same methodology, based on the use of the phenomenal technical capabilities of such powerful computing programs as EViews and Excel.

The material in our book, consisting of seven chapters, is presented as follows. First, in each paragraph of the chapter, a specific problem related to forecasting exchange rates is first given. Secondly, a specific algorithm of actions is proposed using EViews or Excel. Thirdly, some mathematical details are given that explain the essence of this algorithm of actions. Fourthly, a specific example shows how to use this algorithm of actions to solve a particular problem related to forecasting the dollar exchange rate. And finally, fifthly, at the end of each chapter the reader is asked questions to help consolidate the material covered.

Obviously, once our reader is convinced that he can do forecasting on his own, then nothing will stop him from using EViews or Excel to make forecasts on the exchange rate of, for example, the Japanese yen or the British pound, as well as on the future price of oil , gold and other goods.

It is quite clear that in the era of rapid growth of electronic computing technology and general automation, anyone who wants to master the basics of currency forecasting can significantly save time on calculations if he is able to master computer methods of processing statistical data. Therefore, a necessary condition for our collaboration is the reader’s ability to work with a computer at the level of an ordinary user, as well as the presence of certain skills in working with Microsoft Excel. It is also advisable to have at least the most basic understanding of the basics of statistical theory.

In the process of working on the book, the reader will be able to expand his knowledge of the functionality of the Excel program, and also learn how to work in the econometric program EViews. It is quite natural that first of all we will pay attention to teaching those functions of these programs that will be required to forecast exchange rates.

Beginner users who are not yet experienced enough in working with Microsoft Excel can be recommended to read the book by N.I. Makarova, V.Ya. Trofimets Statistics in Excel: Textbook. allowance. – M.: Finance and Statistics, 2003, as well as other textbooks (there are quite a lot of them) telling about the capabilities of this program. In turn, those readers who want to learn how to forecast exchange rates using the econometric program EViews can recommend the following books as a guide: Molchanov I.N., Gerasimova I.A. Computer workshop on the initial course of econometrics (implementation on EViews): Workshop / Growth. state econ. Univ. – Rostov-on-Don, – 2001, and Turuntseva M.Yu. Time series analysis / ICEF SU-HSE. – M., 2003.

In conclusion, I would like to say about one more important condition, without which working with this book will not be very productive: the reader has a desire to master the techniques of forecasting exchange rates, which the author tried to present in the most accessible language.

With those of my readers who, in order to better assimilate the material in the book, will need additional consultations, clarifications, or help in solving assignments, the author is ready to communicate via Skype. You can find out about the conditions for receiving consultations on the book, as well as sign up for a consultation at the following email address: [email protected]

Vladimir Georgievich Bryukov, independent analyst

about the author

Bryukov Vladimir Georgievich, independent financial analyst, has been engaged in banking journalism since 2003.

Since 2005, a special place in his publications has been occupied by statistical methods of analysis of currency and financial markets. Many of his articles published in the magazines “Currency Speculator”, “Investment Banking” and in a number of other publications are devoted to the topic of currency forecasting, primarily the forecast for the US dollar exchange rate. These publications summarize the results of the study of the foreign exchange market conducted by the author and propose optimal methods for forecasting exchange rates, taking into account the latest achievements of modern statistical science. From 2009 to 2015, V. G. Bryukov published monthly forecasts on the Bankir.ru portal, forecasts for the exchange rates of fifteen leading world currencies for the next month. Our readers can see for themselves how accurate the forecasts were by visiting the “Foreign Exchange Market” section on this website. Cooperation with this well-known and authoritative portal, as well as the great interest shown by readers in the book “How to predict the dollar exchange rate. Effective Forecasting Methods Using Excel and EViews” became an important incentive for the author to write a new book on currency forecasting.

Chapter 1.

The concept of stationary and non-stationary time series, identifying the non-stationarity of the series graphically

1.1. Brief characteristics of stationary and non-stationary random processes

Suddenly changing trends in the foreign exchange market, at first glance, are so bizarre and unpredictable that many investors are convinced that making any forecasts about exchange rates is absolutely hopeless. And indeed, if you look, for example, at the dynamics of the monthly exchange rate of the US dollar (as well as at the dynamics of other freely convertible currencies), then this time series cannot be called stationary. To understand what consequences this fact leads to from the point of view of predicting the exchange rate of the American currency, we will have to delve a little deeper into the theory of stationary and non-stationary random processes.

As is known, in the statistical literature it is customary to distinguish three types of random processes: strictly stationary, weakly stationary and non-stationary processes.

A random process that forms a time series X1, X2, X3...Xt (the letter X denotes a variable containing certain market information, for example, on the dynamics of exchange rates, and the numbers - 1,2,3...t - points in time), is called strictly stationary (or, as they also say, stationary in the narrow sense), if the joint probability distribution of all variables X1,X2, X3...Xt is exactly the same as for observations X1+T,X2+T, X3+T...X t+T (where t=t2-t1 is the time lag). In other words, the properties of a strictly stationary time series do not change when the origin of time is changed.

However, in the economic sphere, including in the sphere of financial and foreign exchange markets, there are no strictly stationary processes, and therefore the so-called weak stationary processes or stationary processes in the broad sense are of much greater interest to us. A weak stationary process is understood as a random process in which the mean and variance - regardless of the time period under consideration - have a constant value, and the autocovariance depends only on the length of the lag between the variables under study.

Let me remind our readers that the average value of a time series can be found using the following formula (1.1):

where n is the number of observations in the time series.

Dispersion (a measure of the spread of a random variable, for example, the deviation of the dollar exchange rate from its average value, or, as they also say, from its mathematical expectation) of a time series is the average square of the deviations of a variable (random variable) from its average value.

Accordingly, the dispersion is found according to the following formula (1.2):

I would like to note that in Excel, variance can be found using the VAR function (if the source data is a population) or the VAR function (if the data is a sample).

To assess the tightness and direction of the relationship between variables of the same time series with a certain lag, autocovariance is used. In particular, the autocovariance between the values ​​Xt and Xt -T separated from each other by an interval of T time units is called autocovariance with a lag (delay) T, which is found by the following formula (1.3):

Autocovariance, according to formula (1.3), can be found in Excel using the KOVAR function, which returns the covariance value. Moreover, the latter is called autocovariance in the case when it is used to assess the tightness and direction of the relationship between variables of the same time series with a certain lag. For example, with a lag of minus one month. It has been proven that for independent variables X and Y the covariance is always zero, and for dependent variables it is usually different from zero. If lag t = 0, then the autocovariance is equal to the variance.

If a time series characterizing the dynamics of, for example, exchange rates is weakly stationary, then this means the absence of: firstly, a trend; secondly, strictly periodic oscillations; third, systematic changes in variance; fourthly, any other systematic changes in the time series. Thus, a stationary process in the weak or broad sense is understood as a random process in which the mean and variance - regardless of the time period - have a constant value, and the autocovariance depends on the length of the lag between the variables under consideration.

If a time series is non-stationary, then from a theoretical point of view this implies that it contains not only a random component, but also a trend, and its mean, variance and auto-covariance change over time. In this regard, making forecasts using a non-stationary time series is more difficult (especially for a long period, or during the period of any sharp changes in its dynamics) than using a stationary series.

1.2. Recognizing the stationarity of a time series by plotting its graph

There are various methods for recognizing the stationarity of a time series, however, perhaps the simplest of them is constructing a graph of the time series and then visually determining whether there is a trend in it.

For this purpose, we decided to build a graph of monthly fluctuations in the dollar/ruble exchange rate for the period from June 1992 to April 2010. Readers who do not know how to build charts can familiarize themselves with the algorithm of actions No. 1 and No. 2 presented below

Algorithm of actions No. 1 “How to build charts in Microsoft Excel”

First, you need to go to the Bank of Russia website http://www.cbr.ru/ to take the necessary data on daily dollar rates for the entire period of interest to us. Secondly, after we copy the market statistics into a Microsoft Excel file, all data on the dollar-ruble exchange rate from July 1, 1992 to January 1, 1998 must be divided by 1000, since they are provided on the Bank of Russia website for this period in non-denominated form. Thirdly, in order to retain only the data necessary for us from the entire data array, namely: the dollar exchange rate at the end of the month, it is necessary to filter them using the DATA/additional/advanced filter options.

Step 2. Plotting a graph in Excel

Using the mouse, select a column with monthly data (at the end of the month) at the exchange rate of the ruble-dollar pair for the period from June 1992 (at the end of June, due to the lack of earlier data on the Bank of Russia website, we will take the dollar exchange rate as of July 1, 1992. ) to April 2010 and a column with the corresponding month designations. Next, select the Insert button in the toolbar (in Excel 2007), or the Chart Wizard button (in Excel 1997-2003), in which we select the Graph option (see Fig. 1.1).

Rice. 1.1. Option “Graph” – INSERT/CHART MAZER

As a result, we have a graph (see Fig. 1.2), indicating that the dynamics of fluctuations in the monthly dollar exchange rate cannot be called stationary. Judging by this graph, we can come to the conclusion that there is an upward trend in the time series, and the average value of the dollar exchange rate takes different values ​​in different periods of time. In particular, the graph clearly shows that in the second half of 1992, the dollar exchange rate, although systematically growing, was generally only slightly above the zero level. While by the end of 1998 it exceeded the level of 20 rubles, and in 1999 – 2010. The exchange rate of the American currency fluctuated from 24 rubles. up to 35 rub.

Rice. 1.2. Monthly US dollar exchange rate, in rubles.