Tag: Fees

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Analysing The Costs Involved While Trading The AUD/MXN Exotic Pair

Introduction

Introduction

Introduction

In this exotic forex pair, the AUD represents the Australian dollar, while the MXN – the Mexican Peso. Exotic currency pairs have higher volatility in the forex market when compared to the other major pairs. Here, AUD is the base currency, where MXN is the quote currency. It means that the AUD/MXN exchange rate shows the amount that 1 AUD can buy in terms of MXN. Let’s say that the exchange rate for the AUD/MXN is 15.0346; it means that 1 AUD can be exchanged for 15.0346 MXN.

AUD/HUF Specification

Spread

When you go long in the forex market, you buy the currency pair from your broker at a higher price than when you sell it. The spread in forex is the difference between these two. The spread for the AUD/MXN pair is – ECN: 2 pips | STP: 7 pips

Fees

Some forex brokers charge a commission for every trade on ECN type accounts, depending on the value of the trade. STP accounts do not incur any trading fees.

Slippage

Sometimes when you place a market order, your broker will fill it in with a different price. This is slippage in forex trading; it is caused by increased volatility and the speed at which your broker executes the trade.

Trading Range in the AUD/MXN Pair

The trading range analyzes the spread between the highest and the lowest price movements across multiple timeframes. The trading range analysis ranges from the minimum, average, to the maximum volatility across all timeframes. It is used to assess the potential profitability of a currency pair across all timeframes.

The Procedure to assess Pip Ranges

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

AUD/MXN Cost as a Percentage of the Trading Range

Further analysis of profitability can be aided by analyzing the percentage of the total cost to the volatility. These costs are put in terms of percentages of the volatility on all timeframes.

ECN Model Account costs

Spread = 2 | Slippage = 2 | Trading fee = 1 | Total cost = 5

STP Model Account

Spread = 7 | Slippage = 2 | Trading fee = 0 | Total cost = 9

The Ideal Timeframe to Trade  AUD/MXN Pair

For the AUD/MXN pair, the ideal trading timeframe appears to be the longer timeframes since trading costs are at their lowest here. We notice that the trading costs for the AUD/MXN pair decrease as the timeframes become longer. Also, note that at longer timeframes, the volatility is higher.

For traders wishing to trade the AUD/MXN pair for the shorter-term, timing their trades with when the volatility increases towards the maximum can help. More so, adopting the use of forex limit orders will lower the trading costs by ensuring there are no slippages.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee = 0 + 2 + 1 = 3

Notice how using the forex limit order types reduces the overall trading costs across all timeframes. The maximum trading cost of the AUD/MXN pair, for instance, decreased from 84.75% of the trading range to 50.85%.

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Forex Assets

Trading Costs Involved While Trading The AUD/PKR Forex Exotic Pair

Introduction

Introduction

Introduction

In this exotic, AUD is the Australian Dollar, and PKR is the Pakistani Rupee. Trading exotic currency pairs can be highly volatile compared to major currency pairs. The AUD is the base currency, and the PKR is the quote currency. That implies that the exchange rate of the AUD/PKR is the number of Pakistani Rupees that a single Australian Dollar can buy. Thus, if the exchange of AUD/PKR is 112.584, it means that with 1 AUD, you can buy 112.584 PKR.

AUD/PKR Specification

Spread

The spread in forex trading represents the value difference between the buying price of a currency pair and its selling price. These prices are referred to as “bid” and “ask.” The spread for the AUD/PKR pair is – ECN: 32 pips | STP: 37 pips

Fees

Some forex brokers charge a fee whenever a trader opens a position. The fee is not standardized and depends on the broker and the size of the trade. Note that STP accounts normally don’t attract broker fees.

Slippage

Whether long or short, when you open a position, it can be executed at a different price than what you requested. This price difference is called slippage in the forex market and is a direct result of extreme volatility or broker delays.

Trading Range in the AUD/PKR Pair

If you observed a currency pair’s price movement, you’d notice the difference in price changes across different timeframes. That is the trading range and is used to determine the volatility of a pair.

The Procedure to assess Pip Ranges

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

AUD/PKR Cost as a Percentage of the Trading Range

When you combine the total trading costs of a currency pair, you can analyze the percentage costs across different timeframes. This analysis can help you determine the best time to trade a currency pair.

ECN Model Account Cost

Spread = 32 | Slippage = 2 | Trading fee = 1 | Total = 35

STP Model Account Cost

Spread = 37 | Slippage = 2 | Trading fee = 0 | Total cost = 39

The Ideal Timeframe to Trade the AUD/PKR

As seen above, trading the AUD/PKR pair on shorter timeframes is costlier. In both the ECN and the STP accounts, it is cheaper trading the pair over longer timeframes since the trading costs are lower. Note that the trading costs decrease with an increase in volatility. The lowest trading cost for the AUD/PKR pair is when volatility is at the highest 852.4 pips.

The ideal trading time is evidently on the longer timeframes. But shorter-term traders can open positions when volatility is maximum across 1H, 2H, 4H. and 1D timeframes. Traders can also employ the use of forex pending order types, which eliminate the cost of slippage. Here’s an example with the ECN account.

Total cost = Slippage + Spread + Trading fee = 0 + 32+ 1 = 33

Notice how the trading costs have been reduced across all timeframes when forex pending orders are used. The maximum cost, for example, has reduced from 593.22% to 559.32%.

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Forex Assets

Costs Involved While Trading The AUD/RUB Forex Exotic Pair

Introduction

Introduction

Introduction

AUD is the Australian Dollar, and RUB is the Russian Ruble; AUD/RUB is thus an exotic currency pair. When trading this pair, forex traders should expect relatively high volatility due to its exotic nature.

In this pair, the AUD is the base currency, and the RUB is the quote currency. It means that the AUD/RUB pair’s price represents the amount of Russian Ruble that one Australian Dollar. If the AUD/RUB price is 55.813, it means that you can buy 55.813 Russian Rubles using 1 Australian Dollar.

AUD/RUB Specification

Spread

For the AUD/RUB pair, the spread is the difference between the price at which you can buy the pair from a broker and the price at which you can sell it to the broker.

The spread for the AUD/RUB pair is:

ECN: 10 pips | STP: 15 pips

Fees

If you have an ECN account, different brokers will charge you varying fees per trade, depending on the size of your position. For most STP accounts, however, there are no fees levied whenever you open a position.

Slippage

In the forex market, slippage occurs when you open a position, but it is executed at a price different than the one you requested. The primary determinants of slippage are market volatility and your broker’s speed of execution.

Trading Range in the AUD/RUB Pair

Throughout the day, the price of a currency pair fluctuates. This fluctuation, as observed from different timeframes, is known as the trading range. In forex, the trading range can help a trader determine the volatility of a currency pair, hence assess the risks it carries.

The Procedure to assess Pip Ranges

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

AUD/RUB Cost as a Percentage of the Trading Range

We can combine volatility, slippage, and trading fees to determine the cost of trading a currency pair across different timeframes.

Below are cost percentages for both the ECN and the STP forex accounts. These percentages are in terms of pips.

ECN Model Account

Spread = 10 | Slippage = 2 | Trading fee = 1

Total cost = 13

STP Model Account

Spread = 15 | Slippage = 2 | Trading fee = 0

Total cost = 17

The Ideal Timeframe to Trade the AUD/RUB

In the analyses above, we notice that lower timeframes have low volatility, accompanied by higher trading costs for the AUD/RUB pair. With either the ECN or the STP account, costs are highest when volatility is at the lowest, 3.1 pips. The lowest costs are incurred when volatility is the highest at 802.2 pips.

We can observe that longer-term traders generally enjoy lower trading costs. However, shorter-term traders can reduce their trading costs by trading the AUD/RUB pair when volatility is above average; since costs are lower.

If traders use pending orders, they can eliminate slippage, which lowers the trading costs. Here’s an example with the ECN account.

Total cost = Slippage + Spread + Trading fee

= 0 + 10 + 1 = 11

You can notice that there is a significant reduction in trading costs. For example, the highest trading cost for the ECN account has reduced from 220.34% to 186.44%.

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Forex Assets

Trading The AUD/INR Forex Exotic Pair & Analysing The Costs Involved

Introduction

Introduction

Introduction

AUD/INR is an exotic currency pair in the forex market, with the AUD representing the Australian Dollar and the INR representing the Indian Rupee. Here, the AUD is the base currency, and the INR is the quote currency. That means that the AUD/INR price represents the amount of INR which 1AUD can buy. For example, let’s say that the price of the AUD/INR is 52.2654. It means that 1 AUD can buy 52.2654 INR.

AUD/INR Specification

Spread

When you go long in forex trading, you have to buy the currency pair from your forex broker. Now, if you decide to sell back the pair to the broker, they will buy it at a lower price than they sold to you. The difference between these two prices – also known as “bid” and “ask” – is the spread.

The spread for the AUD/INR pair is:

ECN: 20 pips | STP: 25 pips

Fees

Some brokers charge a commission for positions opened using ECN accounts. They vary depending on the size of the trade. STP accounts are rarely charged any trading fees.

Slippage

Slippage in Forex is the difference between the execution price of a market order and the price at which that order was placed. The slippage comes about due to increased market volatility or inefficiency on the part of your broker.

Trading Range in the AUD/INR Pair

When a currency pair fluctuates, its volatility varies across different timeframes. The analysis of this volatility in different timeframes is done using the trading range. It can help the trader identify the most suitable timeframes for a particular currency pair.

The trading range is expressed in pips. It shows the value of pips you stand to gain or lose on various timeframes.

The Procedure to assess Pip Ranges

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

AUD/INR Cost as a Percentage of the Trading Range

Expressing the total trading costs of a currency pair as a percentage of the trading range helps to understand the trading costs that pair on multiple timeframes. It shows how the trading costs change with volatility.

Below are the trading costs for the AUD/INR  pair on ECN and STP accounts.

ECN Model Account Costs

Spread = 20 | Slippage = 2 | Trading fee = 1

Total cost = 23

STP Model Account

Spread = 25 | Slippage = 2 | Trading fee = 0

Total cost = 27

The Ideal Timeframe to Trade AUD/INR Pair

From the above analyses, we can observe that the lowest trading costs of the AUD/INR pair are on longer timeframes. The lowest trading costs for both the ECN and the STP accounts are when the AUD/INR volatility is at the highest – 518.3 pips. While the shorter timeframes have higher trading costs, intraday traders can take advantage of the maximum volatility periods during these timeframes.

Furthermore, traders can reduce the trading costs by implementing forex limit orders instead of market orders, which are prone to slippages. Here is an example of how the limit orders remove the slippage costs.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 20 + 1 = 21

You can notice that the forex limit orders lowers the overall costs by making the slippage cost 0. In this scenario, the highest trading cost has been reduced from 389.83% to 355.93%.

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Forex Assets

Exploring The Costs Involved While Trading The AUD/KRW Exotic Pair

Introduction

Introduction

Introduction

The AUD/KRW is an exotic currency pair where AUD is the Australian Dollar, and KRW is the South Korean Won. This article will cover some of the essential elements of the AUD/KRW pair that you should know before you start trading this exotic pair.

The AUD is the base currency, and the KRW is the quote currency in this pair. Hence, the pair’s price represents the amount of KRW that can be bought using 1 AUD. For example, say the price of AUD/KRW is 795.89, it means that for every 1 AUD, you can buy 795.89 KRW.

AUD/KRW Specification

Spread

In forex trading, your broker will sell a currency pair to you at a higher price than the one they will buy from you if you sold it back to them. These prices are “bid” and “ask,” and the difference between them is the spread. The spread for the AUD/KRW pair is:

ECN: 21 pips | STP: 26 pips

Fees

STP type accounts incur no trade commissions. For the ECN accounts, the fees charged depend on your broker and the size of your position.

Slippage

When placing a forex market order with your broker, that order might be executed at a different price. The difference is slippage and is due to higher volatilities or execution delays by the broker.

Trading Range in the AUD/KRW Pair

The trading in forex aims to show the trader how a currency pair fluctuates across multiple timeframes. This analysis is used to determine volatility associated with the pair.

If. For example, the trading range of the AUD/KRW across the 4H timeframe is ten pips; it means that a trader can expect to gain or lose  AUD 12.6; since the value of 1 pip is AUD 1.26.

Here’s the trading range of the AUD/KRW  across multiple timeframes.

The Procedure to assess Pip Ranges

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

AUD/KRW Cost as a Percentage of the Trading Range

Here, we calculate the total trading costs that a trader can incur trading the AUD/KRW across different timeframes under different volatility.

The trading cost is expressed as a percentage of the volatility, which is in pips.

ECN Model Account Costs

Spread = 21 | Slippage = 2 | Trading fee = 1

Total cost = 24

STP Model Account

Spread = 26 | Slippage = 2 | Trading fee = 0

Total cost = 28

The Ideal Timeframe to Trade AUD/KRW Pair

From the above analyses, we can observe that the highest costs in both the ECN and the STP accounts are incurred at the 1H timeframe when volatility is at the minimum 58 pips. Although the trading costs decline as the timeframe becomes longer, you can notice that the costs are lower when volatility is at the maximum across all timeframes. Therefore, for intraday traders trading the AUD/KRW pair when volatility approaches, the maximum will help lower the costs.

Using the forex limit order types can also help to reduce the overall costs since it eliminates the risks of slippage encountered in market orders. Here’s an example.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 21 + 1 = 22

Notice how the overall trading costs have been lowered in all timeframes. When volatility is at the minimum at the 1H timeframe, the highest trading cost has declined from 406.78% to 372.88%.

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Understanding The Costs Involved While Trading The CAD/ILS Forex Exotic Pair

Introduction

Introduction

Introduction

CAD/ILS is an exotic currency cross. Here, CAD is the Canadian Dollar, and ILS is the Israeli Shekel. The CAD is the base currency, and the ILS is the quote currency. Therefore, the price of the CAD/ILS pair represents the quantity of the ILS that  CAD can buy. If the price of the pair is 2.6004, it means that 1 CAD can buy 2.6004 ILS.

CAD/ILS Specification

Spread

The buying price and the selling price of a currency pair tend to be different in forex. The difference between these two prices is the spread. The spread for the CAD/ILS pair is: ECN: 22 pips | STP: 27 pips

Fees

Forex brokers charge a commission on every trade made with the ECN account. The commission varies depending on the broker and the type of trade. Trades on STP accounts do not attract a trading fee.

Slippage

It is rare for a trader to get the exact price they request for a trade. Usually, there is a difference between the price requested and the execution price. This difference is the slippage, and it depends on market volatility and the speed of trade execution.

Trading Range in the CAD/ILS Pair

The trading range is the analysis of how currency fluctuates across different timeframes in terms of pips. The trading range is used to analyze a currency pair’s volatility and expected profit. For example, if on the 2-hour timeframe the trading range of the CAD/ILS pair is 10 pips, then a trader can expect to either gain or lose $38.5

Here’s the trading range for the CAD/ILS pair.

The Procedure to assess Pip Ranges

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

CAD/ILS Cost as a Percentage of the Trading Range

The cost of trading any currency involves the slippage, fees, and the spread. These costs vary across different timeframes under different volatility conditions. For a forex trader, analyzing the cost as a percentage of the trading range helps implement informed risk management techniques.

The tables below show the analyses of the trading costs for the CAD/ILS pair across different timeframes.

ECN Model Account

Spread = 22 | Slippage = 2 | Trading fee = 1

Total cost = 25

STP Model Account

Spread = 27 | Slippage = 2 | Trading fee = 0

Total cost = 29

The Ideal Timeframe to Trade CAD/ILS

We can see that the trading cost for the CAD/ILS pair is higher during shorter timeframes and low volatility in both the ECN and STP accounts. Longer-term traders trading on weekly and monthly timeframes enjoy relatively lesser trading costs than shorter timeframe traders.

It is worth noting that for every type of trader, initiating trades when volatility is above average reduces the trading costs. Furthermore, opting to use forex limit orders instead of market orders which are susceptible to slippage, can significantly reduce trading costs. With limit orders, the risk of slippage is removed hence lowering trading costs. Here are the trading costs when limit orders are used.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 22 + 1 = 23

We can see that trading costs for the CAD/ILS have reduced across all timeframes, with the highest cost dropping from 491.53% to 372.88% of the trading range.

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Forex Assets

Asset Analysis – Trading The CAD/PHP Forex Currency Pair

Introduction

Introduction

Introduction

CAD/PHP is an exotic Forex currency pair where CAD is the Canadian Dollar while PHP is the Philippine Peso, the Philippines’ official currency. This article will cover fundamental aspects that you should know about CAD/PHP before you start trading the pair.

Understanding CAD/PHP

In this currency pair, the CAD is the base currency, and the PHP is the quote currency. The CAD/PHP pair price represents the quantity of the PHP that can be bought by 1 CAD. If the CAD/PHP price is 36.181, it means that for every 1 CAD you have, you can buy 36.181 PHP.

CAD/PHP Specification

Spread

In forex trading, the spread is the difference in the value at which a trader can buy a currency pair and the price at which they can sell it.

ECN: 10 pips | STP: 15 pips

Fees

There are no trading fees associated with STP accounts. However, for the ECN accounts, the trading fees that you will incur per transaction are determined by your forex broker.

Slippage

When trading forex, slippage occurs when there is a difference between the price at which you place your trade and the price at which your broker executes it. Slippage in forex frequently happens at times of higher volatility or when significantly larger orders are made.

Trading Range in the CAD/PHP Pair

Forex traders should know how a given currency pair changes within different timeframes. This change in terms of pips is referred to as the trading range. It is used to analyze the historical volatility of a given pair across different timeframes. Therefore, the trading range can be used to determine the amount of profit that a trader should expect to earn.

The Procedure to assess Pip Ranges

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

CAD/PHP Cost as a Percentage of the Trading Range

Slippage, spread, and brokers’ fees amount to trading costs to a forex trader.

Total cost = Slippage + Spread + Trading Fee

Therefore, forex traders should be aware of how these costs vary during different timeframes depending on the pip change of the currency they trade.

The tables below are of the percentage costs that can be expected when trading the CAD/PHP pair under the ECN and STP account types. The costs are expressed as pips.

ECN Model Account

Spread = 10 | Slippage = 2 | Trading fee = 1

Total cost = 13

STP Model Account

Spread = 15 | Slippage = 2 | Trading fee = 0

Total cost = 17

The Ideal Timeframe to Trade CAD/PHP

From the above trading range cost analysis, the most cost is incurred at the 1H timeframe at 220.34% for the ECN account and 288.14% for the STP account. These costs imply that it is not ideal to trade during times of low volatility of about 2.3 pips. However, the trading costs associated with the 1H, 2H, 4H, and the 1D timeframes are lower when the market volatility is above average. Intraday traders can time their entry when the volatility of the CAD/PHP is above average.

The longer timeframes for both types of accounts have lower trading costs associated with them. Thus, longer-term traders can get to enjoy lower costs.

Forex traders can also significantly reduce their trading costs by employing limit order types to ensure they do not experience slippage costs. Let’s look at the total costs when slippage is zero with the ECN account.

Total cost = Slippage + Spread + Trading fee

= 0 + 10 + 1 =11

With the ECN account, the highest trading cost reduces from 220.334% to 169.49%, showing that using the limit order types significantly reduces the trading costs.

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Analyzing The Costs Involved While Trading The NZD/SGD Exotic Forex Pair

Introduction NZD/SGD is the abbreviation for the native currencies of New Zealand and Singapore. It is considered an exotic pair, where NZD is the first (base) currency, and SGD is the second (quote) currency. Understanding NZDSGD This pair’s price determines the value of SGD, which is equivalent to one New Zealand Dollar, NZD. We can […]

Introduction NZD/SGD is the abbreviation for the native currencies of New Zealand and Singapore. It is considered an exotic pair, where NZD is the first (base) currency, and SGD is the second (quote) currency. Understanding NZDSGD This pair’s price determines the value of SGD, which is equivalent to one New Zealand Dollar, NZD. We can […]

Introduction

NZD/SGD is the abbreviation for the native currencies of New Zealand and Singapore. It is considered an exotic pair, where NZD is the first (base) currency, and SGD is the second (quote) currency.

Understanding NZDSGD

This pair’s price determines the value of SGD, which is equivalent to one New Zealand Dollar, NZD. We can quote it as 1 NZD per X number of SGD. For example, if the NZDSGD pair’s value is at 0.90759, we need almost 0.90759 SGD to buy one NZD.

NZDSGD Specification

Spread

The spread comes from the difference between the bid and the ask prices offered by the broker. This value is controlled by the brokers; therefore, traders don’t have a say in this. This value varies on the type of execution used for performing the trades. Below are the ECN and STP values for NZD/SGD currency pair.

Spread on ECN: 26 pips | Spread on STP: 31 pips

Fees

The fee or commission in Forex is similar to the one that is paid to stockbrokers, where it is automatically deducted from traders’ accounts when they take a trade. Note that there are no fees on STP trading accounts, but a few pips are charged on ECN accounts.

Slippage

Slippage happens when a trader tries to open a trade in a price, but it opens at another price. The main reason to occur slippage is the market volatility and the broker’s execution speed.

Trading Range in NZDSGD

Procedure to assess Pip Ranges

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

NZDSGD Cost as a Percent of the Trading Range

If we look at the volatility values at the above table, we can see how the cost changes with the change in volatility of the market. We just have got that ratio and converted into percentages.

ECN Model Account 

Spread = 26 | Slippage = 5 | Trading fee = 8

Total cost = Spread + Slippage + Trading Fee

= 26 + 5 + 8

Total cost = 39

STP Model Account

Spread = 26 | Slippage = 5 | Trading fee = 0

Total cost = Spread + Slippage + Trading Fee

= 26 + 5 + 0

Total cost = 31

The Ideal way to trade the NZDSGD

The NZDSGD is a currency pair that has a lot of volatility and liquidity. Therefore, it is easier for a trader to trade this currency pair. The above-mentioned percentage values are all within almost 500%. It is an indication that the cost is higher in the lower timeframe and lowers in the higher timeframe.

In other words, the cost rises with an increase in volatility. Therefore, the risk of this pair is that it is highly volatile. However, the best time to trade in this pair is when the volatility is at the average value. A decrease in volatility is ineffective, while the increase in volatility is risky. Therefore, sticking to the average value is suitable for this pair.

Furthermore, there’s an additional way to lessen the cost of the trades you execute. This is by placing a pending order as a ‘limit’ order instead of a ‘market’ order. In this case, there will be no slippage. So, in this example, the total cost will be reduced by five pips.

STP Model Account (Using Limit Orders)

Spread = 26 | Slippage = 0 | Trading fee = 0

Total cost = Spread + Slippage + Trading Fee

= 26 + 0 + 0

Total cost = 26

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How Expensive Is It To Trade The NZD/DKK Forex pair?

Introduction NZD is the symbol of the New Zealand dollar, and it is the 10th most traded currency in the Foreign Exchange market. It is the official currency of New Zealand and some other countries like Cook Islands, Niue, the Ross Dependency. Whereas DKK stands for Danish Krone, and it is the official currency of […]

Introduction NZD is the symbol of the New Zealand dollar, and it is the 10th most traded currency in the Foreign Exchange market. It is the official currency of New Zealand and some other countries like Cook Islands, Niue, the Ross Dependency. Whereas DKK stands for Danish Krone, and it is the official currency of […]

Introduction

NZD is the symbol of the New Zealand dollar, and it is the 10th most traded currency in the Foreign Exchange market. It is the official currency of New Zealand and some other countries like Cook Islands, Niue, the Ross Dependency. Whereas DKK stands for Danish Krone, and it is the official currency of Denmark, Greenland, and the Faroe Islands.

The currencies in the Foreign exchange market are traded in pairs. NZD/DKK is the acronym for the New Zealand dollar against the Danish Krone. In this case, the first currency (NZD) is the base currency, and the second (DKK) is the quote currency.

Understanding NZD/DKK

To find the comparative value of one currency in the Forex market, we need another currency to evaluate. If the value of the first(base) currency goes down, the value of the second (quote) currency moves up and vice versa. The market value of NZD/DKK determines the strength of DKK against the NZD. It can be clearly understood as 1 NZD is equal to how much of DKK. So if the exchange price for the pair NZD/DKK is 4.1943, it means we need 4.1943 DKK to buy 1 NZD.

Spread

Forex brokers have two different rates for currency pairs: the bid & ask price. Here the “bid” price at which we can OFFER the base currency, and The “ask” price is at which we can ACQUIRE the base currency. Therefore, the difference between the ask and the bid price is called the spread. Some brokers, instead of charging a split fee for trading, they already have the fees inherent in the spread. Below are the ECN and STP for the pair:

ECN: 15 pips | STP: 20 pips

Fees

When we place any trade, there is some payment/commission we need to pay to the broker. A Fee is simply that payment that we pay to the broker each time we open a position. The fee also fluctuates from the type of broker we use; for instance, there are no charges on STP account models, but a few pips on ECN accounts.

Slippage

The difference between the anticipated and executed price at which the trade is implemented can be termed as Slippage. It can appear at any time but mostly happens when the market is fast-phased and volatile.

Trading Range in NZD/DKK

The trading range is a tabular interpretation of the pip movement in a currency pair for separate timeframes. Using this, we can gauge the risk on a trade for each timeframe. A trading range effectively represents the minimum, average, and maximum pip movement in a currency pair. This can be assessed quickly by using the ATR indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

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

NZD/DKK Cost as a Percent of the Trading Range

The cost of trade primarily varies on the broker and fluctuates based on the volatility of the market. This is for the reason that the total cost includes Slippage and spreads apart after the trading fee. Following is the description of the cost variation in terms of percentages. The knowledge of it is discussed in the subsequent sections for ECN and STP accounts.

ECN Model Account

Spread = 15 | Slippage = 5 |Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 15 + 8 = 28

STP Model Account

Spread = 20 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 20 + 0 = 25

The Ideal way to trade the NZD/DKK

The NZD/DKK is an exotic currency pair, and the volatility in this pair is moderate. As seen in the range table above, the average pip movement on the 1hour time frame is 68. We must know that the cost of trade declines as the volatility of the pair increases. But this should not be held as an advantage because it is unsafe to trade high volatile markets as the prices rise and fall swiftly.

For instance, in the 1-hour timeframe, the maximum pip range value in this pair is 119 pips, and the minimum pip range value is 20 pips. When we compare the fees for both the pip movements, we find that for 20 pip movement fees is 140.00%, and for a 119 pip movement, the fess is only 23.53%.

So, we can substantiate that the prices are more significant for low volatile markets and high for extremely volatile markets. Hence, we must constantly try to make our entries and exits when the volatility is minimum or average than to that of maximum values. But if your preference is certainly towards decreasing your trading costs, you can trade when the market’s volatility is near the maximum values with optimal risk management.

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Forex Assets

Trading Costs Involved While Trading The ‘CHF/CNY’ Exotic pair

Introduction

Introduction

Introduction

CHF/CNY is the abbreviation for the Swiss Franc against the Chinese Yuan. It is categorized as an exotic-cross currency pair with moderate volatility and low trading volume. Here, the Swiss Franc (on the left) is the base currency, and the Chinese Yuan (on the right) is the quote currency. The Chinese Yuan(CNY) is also known as the Renminbi, which is also the official currency of China.

Understanding CHF/CNY

The market price of CHF represents the value of CNY that is compelled to purchase one CHF. It is quoted as 1 CHF per X CNY. If at all the market price of this pair is 7.5423, then this amount of CNY is required to buy one unit of CHF.  

Spread

The distinction between the asking price and the offering price is termed as the spread. ECN and STP account models will have different spread values. The estimated spread values of CHF/CNY pair in both the accounts are mentioned below:

ECN: 19 pips | STP: 24 pips

Fees

The fee is the commission that one pays for the trade. There is no commission charged on STP accounts, but a few additional pips are charged on ECN accounts.

Slippage

The variation between the trader’s expected price and the executed price offered by the broker is referred to as slippage. Its cost varies on the volatility of the market and the broker’s implementation speed.

Trading Range in CHF/CNY

The trading range is represented in a tabular form to understand the pip movement of a currency pair in different timeframes. These values help us determine the profit, which will be generated from trade. To obtain the worth, you will need to multiply the below pip value with the volatility value.

Procedure to assess Pip Ranges

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

CHF/CNY Cost as a Percent of the Trading Range

We can ascertain the cost variations in trade by implementing the total cost to the below-mentioned table. The values are achieved by identifying the proportion between total cost and volatility value, and they are represented in the form of a percentage.

ECN Model Account

Spread = 19 | Slippage = 5 |Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 19 + 8 = 32

STP Model Account

Spread = 24 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 24 + 0 = 29

The Ideal way to trade the CHF/CNY

Understanding the above table is very simple. The proportion of the total cost of trade is directly relative to the value. It is seen that the rates are approximately high on the minimum section and the other way around. The perfect time to enter the market might be where CHF/CNY’s volatility is between the average pip movement.

To lower your risk, it is recommended to trade when the volatility is near the minimum levels. In this case, the volatility is low, and the costs are marginally high compared to the average and the max values. But, if your primary worry is on lowering costs, you may trade when the market volatility is close to the maximum values.

Trading in such timeframes will assure low expenses just as smaller liquidity. It will also include fewer costs by placing orders using limit/pending orders instead of market orders. This will substantially reduce the total cost with slippage being zero.

STP Model Account (Using Limit Orders)

Spread = 24 | Slippage = 0 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 0 + 24 + 0 = 24

I hope this article will aid you to trade this pair in a much efficient way. Cheers!

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Forex Assets

Everything About Trading The CHF/DKK Forex Asset Class

Introduction

Introduction

Introduction

The abbreviation of CHF/DKK is Swiss Franc, paired with the Danish Krone. Here CHF is the official currency of Switzerland and is also the fifth highly traded currency in the Forex market. In contrast, DKK stands for the Danish Krone, and it is the official currency of Denmark and the provinces of Greenland and the Faroe Islands.

Understanding CHF/DKK

In the Foreign exchange market, to ascertain the comparative value of one currency, we need an alternative currency to evaluate. Once when we buy a currency, which is identified as the base currency and simultaneously sell the quote currency. The market value of CHF/DKK helps us to comprehend the power of DKK against the CHF. So if the trade rate for the pair CHF/DKK is 6.9915, it means to buy 1 CHF, we need 6.9915 DKK.

CHF/DKK Specification

Spread

A spread is described as a distinction between the buying & offering price of a Forex pair. In other words, it is a distinction between the ask-bid price of an asset. Below is the spread charges for ECN and STP stock brokers for CHF/DKK pair.

ECN: 12 | STP: 17

Fees

A Fee is a cost that we traders pay to the broker for achieving a trade. The Fees differ on the type of broker (STP/ECN) we use.

Slippage

When we want to implement a trade at a specific market rate, but as a replacement for it, the trade gets implemented at a different rate, and that is because of the slippage. Slippage occurs when we deal with a volatile market, and when we execute a large order at the same time.

Trading Range in CHF/DKK

The trading range in the table below will ascertain the amount of money we will gain or lose in each timeframe. We have the interpretation of the minimum, average, and maximum pip movement in a currency pair in the below table. Now we will use the ATR indicator that demonstrates the price movement in a currency pair.

Below is a table demonstrating the minimum, average, and max volatility (pip movement) on numerous timeframes.

Procedure to assess Pip Ranges

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

CHF/DKK Cost as a Percent of the Trading Range

The price of trade differs on the type of broker and fluctuates based on the volatility of the market. The aggregated cost of trade involves spread, fees, and occasionally slippage if the volatility is high. To reduce the cost of the trade, we can use limit orders as an alternative for market execution.

ECN Model Account

Spread = 12 | Slippage = 5 | Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 12 + 8= 25

STP Model Account

Spread = 17 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 17 + 0 = 22

The Ideal way to trade the CHF/DKK

CHF/DKK is an exotic currency pair. Here, the average pip movement in 1hr timeframe is 99, which implies higher volatility. The greater the volatility, the greater is the risk and low cost of the trade and the other way around. Considering the above tables, we can see from the trading range that when the pip movement is lower, the proportion is high, and when the pip movement is elevated, the proportion is low.

The ratios are higher in the minimum column. This indicates the cost is high when the volatility of the market is lower. For example, on the 1H timeframe, when the volatility is 24 pips, the cost percentage is 104.17%. Meaning, one must accept high costs if they enter or exit trades when the volatility is around 24 pips. So, preferably, it is suggested to trade when the market volatility is higher than the average.

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Forex Assets

CHF/SGD – Trading Costs Involved While Trading This Forex Exotic Pair

Introduction

Introduction

Introduction

CHF/SGD is the short form for the Swiss Franc against the Singapore Dollar. It is classified as an exotic Forex currency pair. Currencies in the Forex market are always traded in pairs. The key currency in the pair (CHF) is the base currency, while the subsequent one (SGD) is the quote currency.

Understanding CHF/SGD

The market value of CHF/SGD determines the value of SGD required to buy one Swiss Franc. It is quoted as 1 CHF per X SGD. Therefore, if the market price of this pair is 1.4699, then these many Singapore Dollar units are necessary to buy one CHF.

Spread

The spread is the distinction between the bid-ask price. Generally, these two prices are set by the stockbrokers. The pip contrast is through which brokers generate revenue.

ECN: 12 pips | STP: 17 pips

Fees

The fee is the commission you pay to the broker on each spot you open. There is no fee charged on STP account models, but a few extra pips on ECN accounts.

Slippage

Slippage is the distinction between the price at which the trader implemented the trade and the actual price he got from the broker – this change based on the volatility of the market and the broker’s implementation speed.

Trading Range in CHF/SGD

The trading range table will help you ascertain the amount of money that you will win or lose in each timeframe. This table represents the minimum, average, and maximum pip movement in a currency pair.

Procedure to assess Pip Ranges

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

CHF/SGD Cost as a Percent of the Trading Range

The price of the trade fluctuates based on the volatility of the market. Therefore, the total cost involves slippage and spreads, excluding from the trading fee. Below is the interpretation of the cost difference in terms of percentages.

ECN Model Account

Spread = 12 | Slippage = 5 |Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 12 + 8 = 25

STP Model Account

Spread = 17 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 17 + 0 = 22

Trading the CHF/SGD

The CHF/SGD is not a volatile pair. For example, the average pip movement on the 1H timeframe is only 22 pips. If the volatility is higher, then the cost of the trade is low. However, it involves an elevated risk to trade highly volatile markets. Also, the higher/lesser the percentages, the greater/smaller are the costs on the trade. So, we can conclude that the costs are higher for low volatile markets and high for highly volatile markets.

To diminish your risk, it is advised to trade when the volatility is around the average values. The volatility here is low, and the costs are a slightly high matched to the average and the maximum values. But, if the priority is towards lowering costs, you could trade when the volatility of the market is near the maximum values with optimal risk management.

Advantage on Limit orders (STP Model Account)

For orders that are executed as market orders, there is slippage applicable to the trade. But, with limit orders, there is certainly no slippage applicable. Only the spread and the trading fees will be accounted for by calculating the total costs. Hence, this will bring down the cost considerably.

Spread = 17 | Slippage = 0 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 0 + 17 + 0 = 17

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Forex Assets

Asset Analysis – Trading The ‘CHF/PLN’ Forex Exotic Pair

Introduction

Introduction

Introduction

CHF/PLN is the abbreviation for the Swiss Franc alongside the Poland złoty. It is categorized as an exotic currency pair that usually has high volatility and low trading volume. Here, the CHF is the base currency, and the PLN is the quote currency. CHF is the official currency of Switzerland, whereas PLN is the national currency of Poland.

Understanding CHF/PLN

The current value of the pair represents the value of PLN that is corresponding to one CHF. It is quoted as 1 CHF per X PLN. For example, if the value of this pair is 4.1627, these many units of PLN are required to buy one Swiss Franc.

CHF/PLN Specification

Spread

In trading, the difference between the bid-ask price is described as the spread. Spread normally fluctuates from broker to broker. The estimated spread on ECN and STP accounts is given below.

ECN: 49 | STP: 54

Fees

There is a small fee or payment charged by the broker for each trade a trader does. This varies on both types of accounts and broker. There are zero fees charged on STP accounts, but a few extra pips are charged on ECN accounts.

Slippage

The difference between the cost at which the trader executed the trade and the cost he received from the broker is termed as Slippage. Fundamentally, Slippage hangs on two factors – Broker’s execution & market’s volatility

Trading Range in CHF/PLN

The trading range is a tabular interpretation of the minimum, average, and maximum pip movement in a different timeframe. Having expertise about this is necessary because it helps in handling risk as well as determine the appropriate times of the day to enter and exit a trade with marginal costs. Below is a table that illustrates the minimum, average, and maximum volatility (pip movement) on several timeframes.

Procedure to assess Pip Ranges

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

CHF/PLN Cost as a Percent of the Trading Range

The number of pips the currency pair change in various timeframes is demonstrated in the table above. With this, we apply these values to get the cost percentage when the volatility is minimum, average, and maximum. This cost percentage will help us sort out an ideal time of the day to enter trades.

The understanding of the cost percentage is easy. If the percentage is above average, then the cost is higher for that specific timeframe and range. If the percentage is at a low level, then the cost is comparatively low for that timeframe and range. Note that, the total cost on a particular trade is calculated by combining the spread, Slippage, and trading fee.

ECN Model Account

Spread = 49 | Slippage = 5 | Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 49 + 8= 62 

STP Model Account

Spread = 54 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 54 + 0 = 59

The Ideal way to trade the CHF/PLN

There are specific times a trader must deal with their trade to decrease both hazard and cost on the trade. This can be made feasible by understanding the above tables. Entering and exiting trades during any time of the day is highly not advised.

The percentages are most elevated in the min column. This means the cost is fairly high when the volatility of the market is low. For instance, on the 1H timeframe, when the volatility is 27 pips, the cost percentage is 218.5%. Meaning, one must bear high costs if they open or close trades when the volatility is around 27 pips. So, ideally, it is proposed to trade when the market volatility is above the average mark.

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Forex Assets

How Best To Trade The ‘CHF/AUD’ Forex Currency Pair?

Introduction

Introduction

Introduction

CHF/AUD is the acronym for the Swiss Franc against the Australian Dollar, and it is an exotic Forex currency pair. Here, the CHF is the base currency, and the AUD is the quote currency. Both CHF and AUD are major currencies and are vastly traded in the foreign exchange market. CHF is the official currency of Switzerland, while AUD is the national currency of Australia.

Understanding CHF/AUD

The price of this pair in the trade market defines the value of AUD equivalent to one Swiss Franc. It is quoted as 1 CHF per X AUD. For instance, if the value of this pair is 1.5318, these many Australian Dollars are required to acquire one CHF. 

Spread

The difference between the ask-bid price is referred to as Spread, which is charged by the broker. This value is different in the ECN and STP accounts. The estimated Spreads for CHF/AUD pair is given below.

ECN: 17 pips | STP: 22 pips

Fees & Slippage

A fee is a price that one pays for the trade. There are zero fees charged on STP accounts, but a few pips are charged on ECN accounts. Slippage is the difference calculated between the price by the trader and the price the trader received from the broker.

Trading Range in CHF/AUD

The trading range is represented in the tabular format to showcase the pip movement of a currency pair in various timeframes. These values are useful in ascertaining the profit that can be generated from trade in advance. To discover the trading costs, we must multiply the below volatility value with the pip value of this pair.

Procedure to assess Pip Ranges

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

CHF/AUD Cost as a Percent of the Trading Range

The trading range is obtained by identifying the ratio between total cost and volatility; it expressed in terms of percentage. Below is the representation of the cost differences of traders in various timeframes and volatilities.

ECN Model Account

Spread = 17 | Slippage = 5 |Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 17 + 8 = 30

STP Model Account

Spread = 22 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 22 + 0 = 27

Trading the CHF/AUD

When the percentage value is higher, the cost of the trade gets more expensive. From the above tables, we can conclude the values are significant in the min column and relatively less significant in the max column. It means that the costs are high when the market’s volatility is low. It is not advisable to trade when both the volatility and cost of trading is high. Balancing both these factors is ideal to trade when the pair’s volatility is in the range of the average values.

Additionally, to lower your costs even further, you can place trades using limit orders instead of market orders. By executing limit orders, the slippage will not be involved in the calculation of the total costs. And this will set the cost of the trades low by a decent number. An example of the same is given below.

STP Model Account (Using Limit Orders)

Spread = 22 | Slippage = 0 |Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 0 + 22 + 0 = 22

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Forex Assets

XTZ/USD – Trading Costs Involved While Trading This Crypto-Fiat Pair

Introduction

Introduction

Introduction

Tezos is a platform that supports the development of DApps and smart contracts. It was created by an ex-Morgan Stanley analyst Arthur Breitman who launched an Initial Coin Offering (ICO) in 2017, raising $232 million. The next year, Tezos launched its beta network in July.

Tezos works by giving incentives to users willing to participate in the development of its protocol. Note that the complete network is decentralized. Users cannot mine Tezos coins as it based on the Proof-of-stake mechanism, unlike the Proof-of-Work in Bitcoin blockchain. Tezos is powered with its own XTZ token, which is created through a process called “baking.”

Understanding XTZ/USD

The price of XTZ/USD depicts the value of the US Dollar equivalent to on Tezos. It is quoted as 1 XTZ per X USD. For example, if the XTZ/USD’s market price is 2.9157, then each XTZ will be worth 2.9157 US dollars.

XTZ/USD specifications

XTZ stands 11th in terms of market capitalization on CoinMarketCap. Forex brokers typically allow trading of only the top 3 or top 5 for trading. So, most brokers do have XTZ enabled for trading. Thus, you will have to approach a cryptocurrency broker instead. They work quite differently from that of the forex broker. For example, instruments are traded in lots with forex brokers, unlike cryptocurrency exchanges.

Spread

Spread is the difference between the buying and selling price of the cryptocurrency. These prices are set by individual traders and not the exchange.  Thus, the spread always varies. Hence, we shall not be considering the spread in further calculations.

Fee

There are a number of fees charged by exchanges for trading cryptos. Below are some types of fees levied by most exchanges.

  • Execution fee (Taker or Maker)
  • 30-day trading volume fee
  • Margin opening fee, if applicable

Note that, the taker or maker fee is charged twice – for opening and closing the trade.

Example

  • Long 1,000 XTZ/USD at $2.9169
  • 30-day volume fee is 0.12%
  • Order is executed as Maker
  • Without Leverage

Total cost of the order = 1,000 x $2.9169 = $2916.9

Assuming the maker fee to be 0.16%, the opening fee will be – $2916.9 x 0.16% = $4.66

In addition, there is 0.12% fee for 30-day volume fee – $2916.9 x 0.12% = $3.50

Since the trade is opened without leverage, the margin opening fee will be $0.

If the order is closed at $2.9605, the total cost of closing will be – 1,000 x $2.9605 = $2960.5. The fee for closing will be:

$2960.5 x 0.16% = $4.73

Therefore, the total fee for this trade can be calculated as:

$4.66 + $3.50 + $4.73 = $12.89

Trading Range in XTZ/USD

The trading range in cryptocurrencies is different from that of foreign exchange. In forex, we calculated the pip movement using the ATR indicator and multiplied it with the pip value to find its worth. Since in cryptocurrency exchanges, there is no concept of pips. So, instead of representing the pip movement, we directly represent the value/worth of the price movement into the table.

The below table represents the value of the price movement for 1,000 quantities of XTZ/USD.

Note: the above values are for trading 1,000 units of XTZ/USD. If X units of the pair are traded, then the ATR values will be,

(ATR value from the table / 1,000) x X units

Procedure to assess ATR values

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

XTZ/USD Cost as a Percent of the Trading Range

Cost as a percent of the trading range represents the relative cost in terms of percentage. It is calculated by finding the ratio between the total cost and the ATR value. The comprehension of it shall be discussed in the subsequent topic.

Taker Execution Model

Opening = $7.58 | Margin fee = $0 | Closing = $7.69 | 30-day volume = $3.50

Total fee = Opening + Margin fee + Closing + 30-day volume = $7.58 + $0 + $7.69 + $3.50 = $18.77

*Assuming taker fee to be 0.26% the trade value.

Maker Execution Model

Opening = $4.66 | Margin fee = $0 | Closing = $4.73 | 30-day volume = $3.50

Total fee = Opening + Margin fee + Closing + 30-day volume = $4.66 + $0 + $4.73 + $3.50 = $12.89

Interpretation of Cost as a Percent of the Trading Range

Firstly, the trading range table, in simple terms, depicts the approximate dollar profit/loss on the trade. For instance, let us consider the average value on the 4H timeframe, which is 71.5. This means that one can gain or lose an average of $71.5 in a matter of 4 hours or so.

With respect to the percentage table, the value of the percentage signifies how expensive the costs are relative to the time frame and profit or loss generated. In other sense, the cost remains the same irrespective of the time frame you trade. For example, let us consider the average percentage on the 4H time frame, which is 18.03%, and the average on the 1H, which is 34.01%. In both cases, the overall is the same, but the cost relative to the profit made, the cost appears to be higher in the 1H time frame because the profit amount is lower than the 4H time frame because there is more price movement on the 4H time frame.

Trading the XTZ/USD

Tezos is under the top 15 in market capitalization according to the data from CoinMarketCap. This signifies that it is intensively traded in the market. Most of the buying and selling happens in the cryptocurrency exchanges.

There are two types of traders – short term and long term. A short term trader may trade the 1H, 2H, 4H, or the 1D time frame, while a long term trader may go with the 1W or 1M time frame. Also, irrespective of the time frame, one must trade when the market volatility is around the average, or maximum value to relatively reduce fees on the trade.

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Forex Assets

AUD/HRK – Analyzing The Costs Involved While Trading This Exotic Pair

Introduction

Introduction

Introduction

The abbreviation of AUD/HRK is Australian Dollar, paired with the Croatian Kuna. Here AUD is the official currency of Australia and is also the fifth most traded currency in the Foreign Exchange market. In contrast, HRK stands for the Kuna, and it is the official currency of Croatia. The Croatian National Bank issues this currency.

Understanding AUD/HRK

In the Forex market, to determine the relative value of one currency, we need another currency to compare. Here, when we buy a currency, which is known as the base currency and simultaneously sell the quote currency. The market value of AUD/HRK helps us to understand the strength of HRK against the AUD. So if the exchange rate for the pair AUD/HRK is 4.5571, it means to buy 1 AUD, we need 4.5571 HRK.

Spread

A spread is defined as the difference between the purchasing & selling price of a Forex pair. In simple words, it is the difference between the bid price and the ask price of an asset. Below is the spread charges for ECN and STP brokers for AUD/HRK pair.

ECN: 40 pips | STP: 43 pips

Fees

A Fee is the charges that we traders pay to the broker for executing a trade. Fees to a much depend on the type of broker(STP/ECN) we use.

Slippage

When we want to execute a trade at a particular market rate, but instead, the trade gets executed at a different rate, and that is because of the slippage. Slippage occurs when we counter a volatile market, and when we execute a large order at the same time.

Trading Range in AUD/HRK

The trading range here will determine the amount of money we will win or lose in a given amount of time. In the below table, we have the representation of the minimum, average, and maximum pip movement in a currency pair. Here we will use the ATR indicator that indicates the price movement in a currency pair. We will evaluate it merely by using it with 200-period SMA.

Procedure to assess Pip Ranges

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

AUD/HRK Cost as a Percent of the Trading Range

The cost of trade depends on the broker type and varies based on the volatility of the market. The overall cost of trade includes spread, fees, and sometimes slippage if the volatility is more. To decrease the cost of the trade, we can use limit orders instead of market execution.

ECN Model Account

Spread = 40 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 40 + 5 = 48

STP Model Account

Spread = 43| Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 43 + 0 = 46

Trading the AUD/HRK

AUD/HRK is an exotic currency pair. As we can see, the average pip movement in 1hr is 133, which implies higher volatility. The higher the volatility, the higher is the risk and lower is the cost of the trade and vice versa. Taking an example, we can see from the trading range that when the pip movement is lower, the charge is high, and when the pip movement is high, the charge is low.

To reduce our costs of trade, we may place trades using limit orders instead of market orders. In the below table, we will see the representation of the cost percentages when limit orders are used. As we can see, the cost of slippage is zero. In doing so, the slippage will not be included in the calculation of the total costs. And this will help us in reducing the trading cost by a considerable margin. An example of the same is given below.

ECN Model Account (Using Limit Orders)

Spread = 40 | Slippage = 0 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 0 + 40 + 5 = 45

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Forex Assets

AUD/RON – What Should You Know Before Trading This Exotic Pair?

Introduction

Introduction

Introduction

The abbreviation of AUD/RON is Australian Dollar paired with Romanian Leu. Here AUD is the official currency of Australia and is also to be the fifth most traded currency in the Forex market. While RON stands for The Romanian leu, and it is the currency of Romania.

Understanding AUD/RON

In AUD/RON currency pairs, the first currency (AUD) is the base currency, and the second currency (RON) is the quote currency. In the Foreign Exchange market, we always buy the base currency and simultaneously sell the quote currency and vice versa. Here, the market value of AUD/RON helps us to understand the strength of RON against the AUD. So if the exchange rate of the pair AUD/RON is 2.9141, it means to buy1 AUD we need 2.9141 RON.

Spread

Forex brokers charge some commission on the trade we open, and that depends on the ask and the bid price by the broker. Spread is the difference between this Ask and Bid price. Every broker has different ask and bid prices. Below is the spread charges for ECN and STP brokers for AUD/RON pair.

ECN: 33 pips | STP: 35 pips

Fees

A Fee is the charges that we traders pay to the broker for opening a trade. This fee depends on the type of broker we use (STP/ECN).

Slippage

When we want to execute a trade at a particular market rate, but instead, the trade gets executed at a different rate. This is because of slippage. Slippage can take place at any time, but mostly we can counter a volatile market, and when we execute a large order at the same time.

Trading Range in AUD/RON

As a trader, our main motive should be to know the market volatility and avoid losses. The trading range here will determine the amount of money we will win or lose in a given amount of time. ATR is a technical indicator that indicates the price movement in a currency pair. In the below table, we have the representation of the minimum, average, and maximum pip movement in a currency pair. We will evaluate it merely by using the ATR indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

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

AUD/RON Cost as a Percent of the Trading Range

The cost of trade depends on the broker type and varies based on the volatility of the market. The overall cost of trade includes spread, fees, and sometimes slippage if the volatility is more. To decrease the cost of the trade, we can use limit orders instead of market execution.

ECN Model Account

Spread = 33 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 33 + 5 = 41

STP Model Account

Spread = 35| Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 35 + 0 = 38

Trading the AUD/RON

AUD/RON is an exotic currency pair. As we can see, the average pip movement in 1hr is 127, which shows the volatility is very high. Note, the higher the volatility, the higher is the risk and lower is the cost of the trade and vice versa.

Taking an example, we can see from the trading range that when the pip movement is lower, the charge is high, and when the pip movement is high, the charge is low. AUD/RON must be traded with proper risk management because of its volatile nature. If we have our strategy with adequate risk management, we can trade in a volatile market too.

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Forex Assets

Costs Involved While Trading The ‘AUD/PLN’ Exotic Pair

Introduction

Introduction

Introduction

The expansion of AUD/PLN is the Australian Dollar and Polish Zloty. Here, AUD is the official currency of Australia, and it is the fifth most traded currency in the Forex market. Hence, it is considered as a major currency. In contrast, the PLN (Polish złoty) is thinly traded, and it is the official currency of Poland.

Understanding AUD/PLN

In AUD/PLN currency pairs, the first currency (AUD) is considered the base currency, and the second (PLN) is considered the quote currency. In the foreign exchange market, we always buy the base currency and simultaneously sell the quote currency and vice versa. The market value of AUD/PLN helps us to understand the strength of PLN against the AUD. If the exchange rate of AUD/PLN is 2.7427, it means that we need 2.7427 PLN to buy 1 AUD.

Spread

In Forex, spreads are inevitable, and it is mainly controlled by the broker. Forex brokers have two prices for currency pairs: the bid and ask price. The bid is the price at which we sell an asset, and ask is the price at which we buy it. The difference between the ask price and the bid price is called the spread. Below are the ECN & STP spread values for AUD/PLN Forex pair.

ECN: 17 pips | STP: 20 pips

Fees & Slippage

A fee in Forex is the charges we pay to the broker for opening a trade. Mostly, these fees depend on the type of broker (STP/ECN) we use.

There are times when we want to execute a trade at a particular price, but instead, we end up executing it at a different price. This happens because of slippage. Slippage can take place at any time, but mostly it occurs, we can counter a volatile market.

Trading Range in AUD/PLN

As a trader, we must be aware of the risks involved before entering any trade. The trading range here will guide us about the amount of money we will win or lose in a given amount of time. In the below table, we have the representation of the minimum, average, and maximum pip movement in a currency pair. We will evaluate it by using the ATR indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

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

AUD/PLN Cost as a Percent of the Trading Range

The cost of trade depends on the broker type and varies based on the volatility of the market. The total cost of trade involves spread, fees, and sometimes slippage if the volatility is more.

ECN Model Account

Spread = 17 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 17 + 5 = 25

STP Model Account

Spread = 20| Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 20 + 0 = 23

Trading the AUD/PLN

AUD/PLN is an exotic currency pair that is rarely traded in the Forex exchange market. The average pip movement in 1hr is 63 pips, and that shows the volatility is at medium range.

Note – The higher the volatility, the higher is the risk, and the lower is the cost of the trade and vice versa. Taking an example, we can see from the trading range when the pip movement is more, the cost is low, and when the pip movement is low, the cost is high.

To reduce our trading costs, we may place trades using limit orders instead of market orders. In doing so, the slippage will not be included in the calculation of the total costs. This greatly helps us in reducing the overall cost of the trade. An example of the same is given below. In the below table, we can see how the trading costs have reduced comparatively.

ECN Model Account (But by using Limit Orders)

Spread = 17 | Slippage = 0 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 0 + 17 + 5 = 22

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Forex Assets

Asset Analysis – Exploring The GBP/AED Forex Currency Pair

Introduction

Introduction

Introduction

We all know that official currencies of the two countries are paired for being exchanged in reference to each other. In GBP/AED, GBP stands for the British pound sterling, and it is is the official currency of the United Kingdom. It is also the 4th most traded currency in the Forex Market and stands right after USD, EURO and YEN. Whereas the AED is known as the United Arab Emirates Dirham, and it is the official currency of the UAE.

GBP/AED

GBP/AED is the abbreviation of the Pound sterling against the Emirati Dirhams. In currency pairs, the first currency is the base currency, while the second currency is the quote currency. In this case, GBP is the base currency, and AED is the quote currency.

Understanding GBP/AED

In the Forex market, if the base currency’s value goes down, the value of the quote currency goes up and vice versa. Also, when we buy a currency pair, we buy the base currency and implicitly sell the quote currency.

The market value of GBP/AED determines the strength of AED against the GBP that can be easily understood as 1GBP is equal to how much AED. So if the exchange rate for the pair GBP/AED is 4.5748, it means that we need 4.5748 AED to buy 1 GBP.

Spread

Forex brokers have two different prices for currency pairs: the bid and ask price. The bid price is the selling price, and ask is the buy price. The difference between the ask and the bid price is called the spread. Spread is basically a type of commission by which brokers make their money. Below are the ECN and STP spread values for the GBP/AED pair.

ECN: 27 pips | STP: 30 pips

Fees

Each time we place a trade, we need to pay some commission on it. A Fee is simply that commission we pay to the broker for opening a particular position. The fee also varies from the type of broker we use; for example, there is no fee on STP account models, but a few pips on ECN accounts.

Slippage

Slippage refers to the difference between the trader’s expected price and the actual price at which the trade is executed. It can occur at any time but mostly happens when the market is fast-moving and volatile. Also, it occurs at the times when we place a large number of orders at the same time.

Trading Range in GBP/AED

The trading range here is to measure the volatility of the GBP/AED pair. Whether we make a profit or loss in a given time period depends on the movement of a currency pair that can be assessed using the trading range table. It is a representation of the minimum, average, and maximum pip movement in a currency pair. This can be evaluated simply by using the ATR indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

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

GBP/AED Cost as a Percent of the Trading Range

The cost of trade mostly depends on the broker and varies based on the volatility of the market. This is because the total cost involves slippage and spreads apart from the trading fee. Below is the representation of the cost variation in terms of percentages. The comprehension of it is discussed in the following sections. We will look into both the ECN model and the STP model.

ECN Model Account

Spread = 27 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 27 + 5 = 35

STP Model Account

Spread = 30| Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 30 + 0 = 33

Trading the GBP/AED

The GBP/AED is an exotic-cross currency pair and is mostly ranging. The volatility of this currency pair is on the lower side. As seen in the Range table, the average pip movement on the 1-hour time frame is only 64. This clearly shows that if we trade in this pair, we will have to wait for a more extended period of time to get some good profit because of such a less movement in the pips.

Note that the higher the volatility, the lower the cost of the trade. However, this is not an advantage as it is risky to trade highly volatile markets. Let’s take, for example, in the 1M time frame, the Maximum pip range value is 3825, and the minimum is 923. When we compare the fees for both the pip movements, we find that for a 923 pip movement, the fee is 3.79%, and for 3825pip movement, fess is only 1.07%.

So, we can confirm that the prices are higher for low volatile markets and low for highly volatile markets. It is safe to trade when the volatility is around the average values, but experienced traders who strictly follow money management can trade the volatile markets as the cost of trade is less there. Cheers!

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Forex Assets

Asset Analysis – Exploring The ‘GBP/BND’ Exotic Pair

Introduction

Introduction

Introduction

The abbreviation of GBP is the Great British Pound, and this currency is mostly known as pound sterling across the globe. It is one of the most-traded currencies in the Forex market and stands at the fourth position right after USD, EUR, & JPY. Whereas the abbreviation of BND is the Brunei Dollar, and it has been the currency of the Sultanate of Brunei since 1967. The Monetary Authority of Brunei Darussalam issues the Brunei Dollar.

GBP/BND

In the Forex market, currencies of the two countries are paired for being exchanged in reference to each other. GBP/BND is the abbreviation for the Pound Sterling against The Brunei Dollar. In this case, the first currency (GBP) is the base currency, and the second (BND) is the quote currency. The GBP/BND is classified as an exotic-cross currency pair.

Understanding GBP/BND

In the Forex, one currency is quoted against the other. To find out the relative value of one currency, we need another currency to compare. If the value of the base currency goes down, the value of the quote currency goes up and vice versa.

The market value of GBP/BND determines the strength of BND against the GBP. This can be easily understood as 1GBP is equal to how much BND. So if the exchange rate for the pair GBP/BND is 1.7660, it means 1GBP is equal to 1.7660 BND.

Spread

Forex brokers set two different prices for the currency pairs – Bid & Ask prices. Here the ‘bid’ price is at which we can sell the base currency, and the ‘ask’ price is at which we can buy the base currency. The difference between the ask and the bid price is called spread. The spread is how brokers make their money. Some brokers, instead of charging a separate fee for trading, they already have the fees inbuilt in the form of spread. Below are the ECN & STP spread values for GBP/BND Forex pair.

ECN: 12 pips | STP: 15 pips

Fees

A Fee is simply the commission we pay to the broker each time we execute a position. There is no fee on STP account models, but a few pips of the trading fee is charged on ECN accounts.

Slippage

Slippage refers to the difference between the expected price at which the trader wants to execute the trade and the price at which the trade gets executed. The slippage can occur at any time but mostly happens when the market is fast-moving and volatile in nature. Slippage also occurs when we place a large number of orders at the same time.

Trading Range in GBP/BND

The amount of money we will win or lose in a given time can be assessed by using the trading range table. It is a representation of the minimum, average, and maximum pip movement in a currency pair. This can be evaluated easily by using the ART indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

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

GBP/BND Cost as a Percent of the Trading Range

The cost of trade mostly depends on the type of broker we chose and also varies based on market volatility. This is because the total cost involves slippage and spreads apart from the trading fee. Below is the representation of the cost variation in terms of percentages. The comprehension of it is discussed in the following sections.

ECN Model Account

Spread = 12 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 12 + 5 = 20

STP Model Account

Spread = 15 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 15 + 0 = 18

Trading the GBP/BND

The GBP/BND is an exotic-cross currency pair and it is typically a Ranging market. The average pip movement of this pair on the 1H timeframe is 55 pips. Since the market is ranging, the volatility is less and the trading costs are relatively high while trading the GBP/BND pair. Always remember that cost of trade increases as the volatility decreases and vice versa.

Conservative traders who don’t mind spending more on trading fees can trade this pair on all the timeframes as the volatility is moderate. Comprehending the above tables, we should note that the costs on the trade are high when the volatility is less. But traders who don’t prefer spending more on trading costs can trade this pair when the volatility of the market is around the maximum values. Cheers!

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Forex Assets

Asset Analytics – Analyzing The GBP/DKK Currency Pair

Introduction

Introduction

Introduction

GBP Pound sterling, also known as the pound, is the official currency of the United Kingdom and many others. The sterling is the fourth most-traded currency in the forex market. Where in DKK is known as The krone and sometimes Danish crown. It is the official currency of Denmark, Greenland, and the Faroe Islands.

GBP/DKK is the abbreviation for the Pound sterling against the Danish crown. In the Forex, one currency is quoted against the other. Here, the first currency(GBP) is the base currency, and the second(DKK) is the quote currency. The GBPDKK is classified as exotic-cross currency pair.

Understanding GBP/DKK

In Forex, to find out the relative value of one currency, we need another currency to compare. The market value of GBPDKK determines the strength of DKK against the GBP that can be easily understood as 1GBP is equal to how much DKK, so if the exchange rate for the pair GBPDKK is 8.3430. It means that we need 8.3430DKK to buy 1 GBP.

If the value of the base currency goes down, the value of the quote currency goes up and vice versa.

Spread

Forex brokers have two different prices for currency pairs: the bid and ask price. The bid price is the selling price, and ask is the buy price.

The difference between the ask and the bid price is called the spread. The spread is how brokers make their money.

ECN: 39 pips | STP: 42 pips

Fees

A Fee is simply the commission we pay to the broker on each position we open. There is no fee on STP account models, but a few pips on ECN accounts.

Slippage

slippage refers to the difference between the trader’s expected price and the actual price at which the trade is executed. It can occur at any time but mostly happens when the market is fast-moving and volatile. Also, sometimes when we place a large number of orders at the same time.

Trading Range in GBP/HKD

The amount of money you will win or lose in a given amount of time can be assessed using the trading range table. This is a representation of the minimum, average, and maximum pip movement in a currency pair. This can be evaluated simply by using the ART indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

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

GBP/DKK Cost as a Percent of the Trading Range

The cost of trade mostly depends on the broker and varies based on the volatility of the market. This is because the total cost involves slippage and spreads apart from the trading fee. Below is the representation of the cost variation in terms of percentages. The comprehension of it is discussed in the following sections.

ECN Model Account

Spread = 39 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 39 + 5 = 47

STP Model Account

Spread = 42 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 42 + 0 = 45

Trading the GBP/DKK

The GBP/DKK is an exotic-cross currency pair and is a volatile market. For instance, the average pip movement on the 1H timeframe is only 333 pips. DKK is considered to be an emerging pair.

Note that the higher the volatility, the lower is the cost of the trade. However, this is not an advantage as it is risky to trade highly volatile markets. Also, the larger/smaller the percentages, the higher/lower are the costs on the trade. So, we can infer that the prices are higher for low volatile markets and high for highly volatile markets.

It is recommended to trade when the volatility is around the minimum values. The volatility here is low, and the costs are a little high compared to the average and the maximum values. But, if you’re priority is towards reducing costs, you may trade when the volatility of the market is around the maximum values.

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Forex Assets

Exploring The GBP/HKD Forex Exotic Currency Pair

Introduction

Introduction

Introduction

GBP Pound sterling, also known as the pound, is the official currency of the United Kingdom and many others. It is one of the oldest currencies and is further divided into pence. Where in HKD is known as Hong Kong Dollar, and it is the official currency of Hong Kong. One HKD is divided into 100 cents.

GBP/HKD is the abbreviation for the Pound sterling against the Hong Kong Dollar. Here, the first currency (GBP) is the base, and the second currency (HKD) is the quote currency. It is classified as an exotic-cross currency pair.

Understanding GBP/HKD

In Forex, to find out the relative value of one currency, we need another money to compare. The market value of GBP/HKD determines the strength of HKD against the GBP, i.e., It can simply be understood as 1GBP is equal to how much HKD, so if the exchange rate for the pair GBPHKD is 9.254. It means that we need 9.254 HKD to buy 1 GBP. If the value of the base currency goes down, the value of the quote currency goes up and vice versa.

Spread

Forex brokers have two different prices for currency pairs: the bid and ask price. The bid price is the selling price, and ask is the buy price. The difference between the ask and the bid price is called the spread. The spread is how brokers make their money. For this currency pair, the spread values for ECN & STP brokers are as follows.

ECN: 33 pips | STP: 36 pips

Fees

A Fee is simply the commission we pay to the broker on each position we open. There is no fee on STP account models, but a few pips on ECN accounts.

Slippage

Slippage refers to the difference between the trader’s expected price and the actual price at which the trade is executed. It can occur at any time, but it mostly happens when market orders are placed during high volatile conditions. It may also occur when large orders are placed at a time.

Trading Range in GBP/HKD

The amount of money we win or lose in a given amount of time can be assessed using the trading range table. The following table is a representation of the minimum, average, and maximum pip movement in a currency pair. This can be assessed very easily by using the Average True Range (ATR) indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

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

GBP/SGD Cost as a Percent of the Trading Range

The cost of trade varies based on the volatility of the market. This is because the total cost involves slippage and spreads apart from the trading fee. Below is the representation of the cost variation in terms of percentages. The comprehension of it is discussed in the coming sections.

ECN Model Account

Spread = 33 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 15 + 5 = 41

STP Model Account

Spread = 36 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 19 + 0 = 39

Trading the GBP/HKD Currency Pair

The GBPHKD is an exotic-cross currency pair and is a normal ranging market. For instance, the average pip movement on the 1H timeframe is only 49 pips. Note that the higher the volatility, the lower is the cost of the trade. However, this is not an advantage as it is risky to trade highly volatile markets.

Also, the larger/smaller the percentages, the higher/lower are the costs on the trade. So, we can infer that the costs are higher for low volatile markets and high for highly volatile markets. To reduce our risk, it is recommended to trade when the volatility is around the minimum values. The volatility here is low, and the costs are a little high compared to the average and the maximum values. But, if your priority is towards reducing costs, you may trade when the volatility of the market is around the maximum values.

Advantage from Limit orders

When orders are executed as market orders, there is slippage on the trade. But, with limit orders, there is no slippage as such. Only trading fees and the spread will be taken into consideration to calculate the total costs. This method will bring down the cost significantly.

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Forex Assets

Everything About The EUR/RUB Forex Asset

Introduction

Introduction

Introduction

The EUR/RUB is the abbreviation of the Euro Area’s Euro against the Russian Ruble. This is an exotic-cross currency pair. The volatility and volume in this pair are good enough for traders to day trade this currency. Here, the EUR is the base currency, and the RUB is the quote currency.

Understanding EUR/RUB

The price in the exchange market of the EUR/RUB specifies the value of RUB that is needed to purchase one Euro. It is quoted as 1 EUR per X RUB. For example, if the value of EUR/RUB is 85.769, this much of Rubles are required to buy one Euro.

Spread

The price of buying is not the same as the price for selling. One must pay the ask price for buying and bid price for selling. And the difference between the bid price and the ask price is called the spread. This value varies based on the type of execution model used by the broker.

ECN: 42 pips | STP: 44 pips

Fees

Like in the stock market where you pay commission on both sides of your trade, in the forex market as well, you must pay few pips of fee for your trade. This could be between 5-10 pips. Note that the fee on STP accounts is nil.

Slippage

Due to the volatility in the market and the broker’s execution speed, there is a difference in the price at which you execute the trade and price, which is actually given by the broker. This is known as slippage.

Trading Range in EUR/RUB

The depiction of the minimum, average, and maximum volatility in the market for different timeframes is given in the below table. These values help us in assessing the risk of trade for a specified time frame.

Procedure to assess Pip Ranges

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

EUR/RUB Cost as a Percent of the Trading Range

The cost of trade changes as the volatility of the market also changes. In the below tables, we have illustrated the cost variation in the trade-in different timeframes and volatilities for both ECN and STP model account.

ECN Model Account

Spread = 42 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 42 + 3 = 48

STP Model Account

Spread = 44 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 44 + 0 = 47

Trading the EUR/RUB

The EUR/RUB is one of the most traded exotic-cross currency pairs. The volatility in this pair is pretty high. However, a retail trader can still trade it.

Consider the above two volatility tables. We can see that the values are large in the min column and small in the max column. This means that the costs are more when the volatility is low, and less when the volatility is high.

Traders looking to trade with low cost can consider trading when the volatility is high. And traders who need low volatility will have to bear higher costs. There are traders who look for a balance between the two. Such traders can trade when the volatility of the market is around the average values. This will ensure enough volatility as well as low costs.

Another simple way to reduce cost is by placing orders using limit and stop instead of the market. This will take away the slippage on the trade. Hence, this will reduce the total cost of the trade. So, in our example, the total cost will reduce by three pips.

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Forex Assets

What Should You Know Before Trading The EUR/RON Forex pair

Introduction

Introduction

Introduction

The abbreviation of the Euro Area’s euro against the Romanian Leu is written as EUR/RON. This pair is classified as an exotic currency pair. The volume traded in this pair is pretty low. Here, the EUR is the base currency, and the EGP is the quote currency.

Understanding EUR/RON

The value of the EUR/RON determines the value of RON equivalent to one EUR. It is quoted as 1 EUR per X RON. For example, if the value of EUR/RON is 4.8512, then exactly 4.8512 RON is required to buy one Euro.

Spread

The difference between the bid and the ask price for that currency pair is referred to as the spread. The spread is different on ECN and STP accounts.

ECN: 75 pips | STP: 80 pips

Fees

The fee is simply the commission on the trade. One has to pay a few pips of fee on the trade for entering as well as exiting the trade. However, this is only on ECN accounts. On STP accounts, there is no fee.

Slippage

The slippage is the difference between the trader’s required price for execution and the price the broker actually gave the trader. There is this difference due to the volatility of the market and the broker’s execution speed.

Trading Range in EUR/RON

A Trading range is the illustration of the pip movement of a currency pair in different timeframes. The values are obtained from the average true indicator. The volatility values help us in determining the number of pips our trade can move in a given time frame.

Procedure to assess Pip Ranges

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

EUR/RON Cost as a Percent of the Trading Range

With the volatilities values obtained above, we can even determine the variation in the cost of the trade. Below are the cost variation tables for ECN and STP accounts.

ECN Model Account

Spread = 75 | Slippage = 5 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 5 + 75 + 3 = 83

STP Model Account

Spread = 80 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 80 + 0 = 85

Trading the EUR/RON

Which timeframe to trade?

Consider the below chart on the 1H timeframe. We can clearly see that the volatility in this pair is very high. There is hardly any movement for a few hours, but a big spike up/down suddenly. And this type of movement is very risky for business. Hence, it is recommended to avoid trading smaller timeframes of this pair.

Nonetheless, considering the 1D chart of EUR/RON, we can see that the volatility is decent enough. Hence, this becomes a tradable timeframe for us. In fact, any timeframe above the daily can be traded efficiently.

How to manage costs?

In the trading cost table, we can see that the percentage values are large in the min column and small in the max column. This means that the costs are high for low volatilities and small for high volatilities. So, to have a balance between the volatility and costs, one may trade when the volatility is around average values.

Furthermore, trading through limit orders is another way to reduce costs. In doing so, the slippage on the trade will not be applied to the total costs.

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Forex Assets

Costs Involved While Trading The EUR/CZK Forex Pair

Introduction

Introduction

Introduction

EUR/CZK is the abbreviation for the Euro Area’s euro against the Czech Koruna. This pair is an exotic-cross currency pair. Here, the EUR is the base currency, and the CZK is the quote currency.

Understanding EUR/CZK

The price of this pair in the exchange market determines the value of CZK equivalent to one euro. It is quoted as 1 EUR per X CZK. So, if the value of this pair is 26.0896, these many Korunas are required to purchase one EUR.

 

Spread

Spread is the difference between the bid and the ask price offered by the broker. This value is different on the ECN account model and STP account model. An approximate value for the two is given below.

ECN: 45 pips | STP: 47 pips

Fees

A fee is another term for the commission of the trade. There is no fee on STP accounts, but a few pips on ECN accounts.

Slippage

Slippage is the difference between the price intended by the trader and the price the trader actually received from the broker.

Trading Range in EUR/CZK

The trading range is the tabular representation of the pip movement of a currency pair in different timeframes. These values are useful for determining the profit that can be generated from a trade before-hand. To find the value, you must multiply the below volatility value with the pip value of this pair.

Procedure to assess Pip Ranges

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

EUR/CZK Cost as a Percent of the Trading Range

This is the representation of the cost variation of trades for different timeframes and volatilities. The values are obtained by finding the ratio between the total cost and the volatility value and are expressed as a percentage.

ECN Model Account

Spread = 45 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 45 + 3 = 51

STP Model Account

Spread = 47 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 47 + 0 = 50

Trading the EUR/CZK

The larger the percentage values, the higher is the cost of the trade. From the above tables, we can see that the values are large in the min column and comparatively smaller in the max column. This means that the costs are high when the volatility of the market is low.

It is neither advisable to trade when the volatility of the market is high, nor when the costs are high. To have a balance between both these factors, it is ideal to trade when the volatility of the pair is in the range of the average values.

Furthermore, to reduce your costs even further, you may place trades using limit orders instead of market orders. In doing so, the slippage will not be included in the calculation of the total costs. And this will bring down the cost of the trades by a decent number. An example of the same is given below.

Spread = 45 | Slippage = 0 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 0 + 45 + 3 = 48

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Forex Assets

Analyzing The EUR/PLN Exotic Currency Pair

Introduction

Introduction

Introduction

EUR/PLN is the abbreviation for the Euro Area’s euro against the Polish Zloty. This European currency is classified as an exotic-cross currency pair. In this pair, the EUR is the base currency, and the PLN is the quote currency.

Understanding EUR/PLN

The value of this pair simply represents the value of PLN equivalent to one Euro. It is quoted as 1 EUR per X PLN. An example of the same is shown below.

Spread

The spread is a popular terminology used in the forex industry, which is defined as the difference between bid and ask prices in the market. This is not the same on all brokers but varies based on the execution model they use.

ECN: 30 pips | STP: 34 pips

Fees

A Fee is similar to the commission that is paid to the brokers. Fee on ECN accounts is between 5-10 pips, while it is nil for STP accounts.

Slippage

Slippage is the difference between the price wanted by the client and the price they actually received from the broker. There is this difference due to two reasons:

  • Broker’s execution speed
  • Market volatility

Trading Range in EUR/PLN

A trading range is a table that represents the minimum, average, and maximum volatility of the market for various timeframes. With these pip movements from the past, we can determine the profit/loss that can be made from a trade.

Procedure to assess Pip Ranges

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

EUR/PLN Cost as a Percent of the Trading Range

In calculating the total costs, spread and slippage are variables. These values change as the volatility of the market changes. And below, we have represented the variation of the costs by applying the values from the trading range table.

ECN Model Account

Spread = 30 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 30 + 3 = 36

STP Model Account

Spread = 34 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 34 + 0 = 37

Trading the EUR/PLN

Trading the EURPLN is not a hurdle. Though this pair is a major/minor currency pair, its characteristics are similar to that of majors/minors.

Firstly, the spread is around 30 pips, which are lower compared to other exotic-cross currencies involving EUR as the base currency. Secondly, the volatility of this pair is pretty decent. It is neither too high nor too low.

Coming to the above two tables, we can see that the percentage values are large in the min column and gets smaller as we move towards the max column. Since the values in the min column are significant, it is not advisable to trade this pair during low volatility. To have enough volatility with inexpensive costs, one may trade when the volatility is around the average values.

Placing orders through ‘limit’ and ‘stop’ would further decrease the costs. In doing so, the slippage on the trade will be nullified, and this will, in turn, bring down the total costs.

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Forex Assets

Everything You Should Know About The EUR/SEK Forex Pair

Introduction

Introduction

Introduction

EUR/SEK is the abbreviation for the Euro Area’s euro against the Swedish Krona. This exotic-cross currency pair has enough volatility but lacks liquidity. This is the reason this has pretty high spreads. In this pair, EUR is the base currency, and SEK is the quote currency.

Understanding EUR/SEK

The market price of EURSEK as a whole determines the value of SEK that is required to buy one euro. It is quoted as 1 EUR per X SEK. For example, if the value of this pair is 10.5839, then this amount of SEK is required to purchase one EUR.

EUR/SEK Specification

Spread

The difference between the bid price and the ask price is called the spread. This value is different from one ECN and STP accounts. The approximate values of the same are mentioned below.

Spread on ECN: 50 pips | Spread on STP: 55 pips

Fees

The fee is simply the commission paid for the trade. This, too, depends on the type of execution model used by the broker. The fee on ECN accounts is a few pips, while it is nil on STP accounts.

Slippage

The slippage is the difference between the trader’s intended price and the broker’s executed price. There is this difference because orders are executed by the ‘market.’ The two main reasons for slippage to occur include, broker’s execution speed & Market volatility.

Trading Range in EUR/SEK

With the values in the trading range, which depict the pip movement in different timeframes, we can determine the gain or loss that is possible on trade.

These values are obtained by combining the moving average with the average true range indicator. A complete procedure to get it into your charts is given below.

Procedure to assess Pip Ranges

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

EUR/SEK Cost as a Percent of the Trading Range

Firstly, the total cost is calculated by finding the sum of the spread, slippage, and trading fee. And this cost varies as the volatility of the market changes. Below is a table that represents the cost variation for EURSEK for both ECN and STP accounts.

ECN Model Account 

Spread = 50 | Slippage = 3 | Trading fee = 3

Total cost = Spread + Slippage + Trading Fee = 50 + 3 + 3 = 56

STP Model Account

Spread = 55 | Slippage = 3 | Trading fee = 0

Total cost = Spread + Slippage + Trading Fee = 55 + 3 + 0 = 58

Note: The costs may seem high because of the Spreads. As we know, these Spreads keep changing from time to time. At times we have seen the spreads for this pair being as low as 10. But we have considered the maximum spread to give you the maximum cost percentages.

The Ideal way to trade the EUR/SEK

From the trading range table, we can clearly see that the volatility in this pair is pretty high. However, this does not mean that it cannot be traded.

Coming to the next two tables, the percentage values are within the 600% mark. Note that the higher the value of the percentages, the higher is the cost. The opposite holds true, as well. Since the percentage values are high in the min column, we can conclude that the costs are high when the volatility of the market is low.

Now, to have a balance between the costs and the volatility, one must trade during those times when the volatility of the market is around the average values in the trading range table.

Moreover, there is a way through which we can nullify the slippage on the trade. This can simply be done by placing orders using ‘limit’ instead of ‘market.’ In doing so, the total cost will reduce by a decent amount.

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Forex Assets

Analyzing The USD/BND Forex Currency Pair

Introduction

Introduction

Introduction

USD/BND is the abbreviation for the US Dollar against the Brunei Dollar. Brunei is located on the Asian continent, and this pair is classified as an emerging currency pair. In the USD/BND, USD is the base currency, and BND is the quote currency.

Understanding USD/BND

The market price of this currency pair specifies the value of BND equivalent to one USD. It is quoted as 1 USD per X BND. For example, if the value of this pair is 1.3711, then these many units of the quote currency (BND) are required to purchase one unit of the base currency (USD).

Spread

The difference between the bid and the ask price is called the spread. The spread varies from broker to broker and also by execution model used.

ECN: 5 pips | STP: 8 pips

Fees

A fee is a synonym for commission. This is similar to the one that is paid to the stockbrokers. Below is the fee on ECN and STP brokers.

Fee on ECN – 0 pips | Fee on STP – 5-10 pips

Slippage

The difference between the price requested by you and the price you actually received from the broker is called slippage. There are two reasons for slippage to place:

  • Market volatility
  • Broker’s execution speed

Trading Range in USD/BND

A trading range is a tabular representation of the minimum, average, and the maximum volatility of this currency pair. And these values help in determining the profit/loss of a trade in a given timeframe. Hence, this is a great risk management tool for traders.

Procedure to assess Pip Ranges

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

USD/BND Cost as a Percent of the Trading Range

The cost as a percent of the trading range is the representation of the cost variation in a trade for different volatilities are timeframes. This variation is represented as a percentage. The magnitude of these percentages depicts the highness and lowness of a trade.

ECN Model Account

Spread = 5 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 5 + 3 = 11

STP Model Account

Spread = 8 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 8 + 0 = 11

The Ideal way to trade the USD/BND

Trading the USD/BND is simple. This pair is not so volatile, like the other emerging pairs. Moreover, the spreads are low too.

From the above tables, we can see that the percentage values are pretty high in the minimum column, and comparatively lower in the max column. This means that the costs are high for low volatile markets and low for high volatile markets. So, traders who need high volatility may enjoy low costs. And trades who want to minimize their risk and trade low volatile markets will have to bear higher costs. Finally, traders who need a balance between the two may trade when the volatility of the market is around the average values. This will ensure the equilibrium between volatility and costs.

Moreover, there is a way through which you can cut off the slippage on your trade. Placing orders as limit orders instead of market orders will take away the slippage and bring down the total cost on the trade. So, in our example, the total cost would reduce by three pips.

We hope this article will change the way you trade this currency pair. Happy trading!

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Forex Assets

Trading The USD/HRK Forex Currency Pair

Introduction

Introduction

Introduction

USDHRK is the abbreviation for the United States Dollar against the Croatian Kuna. Thw USDHRK is an emerging currency pair. Unlike the major/minor currency pair, this pair has high volatility and low liquidity. The volume is less too. Here, USD is the base currency, and HRK is the quote currency.

Understanding USD/HRK

The value of this pair determines the value of HRK equivalent to one USD. It is simply quoted as 1 USD per X HRK. For example, if the value of this pair is 6.6123, then 6.6123 Kuna is required to buy one US Dollar.

Spread

Spread is the way through which retail brokers make money from their clients. And it is through the difference between the bid price and the ask price in the market. This value is set by the brokers and varies from the type of execution model they use.

ECN: 25 pips | STP: 30 pips

Fees

A fee is basically the commission that you are liable to pay one each trade you make. This is similar to the one that is levied by stockbrokers. However, the fee is charged only by ECN brokers. There is no fee as such in STP accounts.

Slippage

In market orders, when you execute a trade, you don’t get the exact executed price. The actual executed price is different. This difference between the prices is what is known as slippage. Market volatility and the broker’s execution speed are two factors that affect the slippage on the trade.

Trading Range in USD/HRK

The minimum, average, and maximum volatility can be used to determine the risk of a trade. The profit/loss can be simply calculated by multiplying the volatility value with the pip value (per standard lot).

Procedure to assess Pip Ranges

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

USD/HRK Cost as a Percent of the Trading Range

The total cost of the trade can be found as the sum of spread, slippage, and trading fee. This total cost is variable and is dependent on the volatility of the market. Below is the representation of the variation in the costs for different volatilities and timeframes.

ECN Model Account

Spread = 25 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 25 + 3 = 31

STP Model Account

Spread = 30 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 30 + 0 = 33

The Ideal way to trade the USD/HRK

The percentages in the above tables depict how the cost varies on the trade. The higher the value, the higher is the cost of the trade. Similarly, the smaller the percentages, the lower is the costs.

From the above tables, it can be ascertained that the costs are high for low volatilities, as the percentage values are high in the min column. And the costs are lower for high volatilities. So, the ideal way to trade this pair is dependent on the type of trader you are. For instance, a trader who is particular about costs may trade when the volatility of the currency pair is high. The traders who wish to keep a balance between the two may trade during those times when the volatility is around the average values.

Moreover, one may reduce their costs by trading using limit or stop orders instead of market orders. This will cut off the slippage factor on the trade and bring down the total costs pretty much. An example of the same is given below.

Spread = 25 | Slippage = 0 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 0 + 25 + 3 = 28

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Forex Assets

Analyzing The USD/MAD Forex Currency Pair

Introduction

Introduction

Introduction

USD/MAD is the abbreviation for the US dollar against the Moroccan Dirham. This pair is classified as an emerging currency pair in the forex market. In this pair, USD is the base currency, and MAD is the quote currency. Typically. It is seen that this pair has pretty low volatility and liquidity. However, it can still be traded under certain conditions.

Understanding USD/MAD

The market price of this currency pair determines the value of MAD that is equivalent to one USD. For instance, if the current market price of USD/MAD is 9.5867, then these many Moroccan Dirhams are required to purchase one USD.

Spread

The difference between the bid price and the ask price is referred to as the spread. This is the primary way through which brokers generate revenue. Spread is a variable and is different with different brokers. It also differs based on the execution model used by the broker.

ECN: 35 pips | STP: 40 pips

Fees

The commission paid on each trade is the fee on that trade. Note that, the concept of the fee is only ECN accounts and not STP accounts. The fee on ECN accounts is typically between 5-10 pips.

Slippage

Slippage is the difference between the price intended by the client and the price that is actually executed by the broker. There is this difference due to two reasons:

  • Market’s volatility
  • Broker’s execution speed

Trading Range in USD/MAD

The trading range is the tabular representation of the volatility of the market in different timeframes. These values help in assessing the minimum, average, and maximum profit/loss in six different timeframes.

Procedure to assess Pip Ranges

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

USD/MAD Cost as a Percent of the Trading Range

The total cost of the trade is calculated by adding up the slippage, spread, and the trading fee. It is not constant but varies based on the volatility of the market. Below are tables that represent how costs vary for different timeframes and volatilities.

ECN Model Account

Spread = 35 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 35 + 3 = 41

STP Model Account

Spread = 40 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 40 + 0 = 43

The Ideal way to trade the USD/MAD

Starting off from the trading range table, we can see that the volatility of this pair is quite high. The spread, too, is higher than other emerging pairs. So, it is not really ideal to trade at any time in 24 hours.

When we have a look at the cost percentage tables, we can see that the percentages are high in the minimum column, and low in the max column. This implies that the costs are high during low volatilities, and costs are low during high volatilities. So, the best time to trade this pair is when the volatility is around the average values because this assures decent volatility as well as affordable costs.

Furthermore, the costs can be reduced by placing orders as ‘limit’ instead of ‘market’. In doing so, the slippage on the total costs will be made zero. So, spread and trading fee will be the only factors involved in calculating the total cost.

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Forex Assets

Understanding The USD/TWD Forex Currency Pair

Introduction

Introduction

Introduction

USDTWD is the abbreviation for the US dollar against the New Taiwan Dollar. Due to the involvement of Taiwan in this pair, this pair is classified as an Asian emerging currency pair. Here, the US Dollar is the base currency, and the New Taiwan Dollar is the quote currency.

Understanding USD/TWD

The TWD required to purchase one USD is determined by the price on the exchange rate. It is simply quoted as 1 USD per X TWD. For example, if the price of this pair was 25.856, a rounded figure of 26 TW Dollars are needed to buy one US Dollar.

Spread

The spread is a type of fee that is paid to the broker on each trade. The amount to be paid depends on the lot size traded and also the volatility of the market. It is simply the difference between the bid price and the ask price on the exchange board. The bid and ask price is typically different from different brokers. It also varies based on the execution model implemented by the broker.

ECN: 27 pips | STP: 30 pips

Fees

The commission that a broker charges on each of your trade is the fee. This, too, depends on the type of execution model. Note that there is no fee on STP accounts. However, this is covered by higher spreads.

Slippage

In market orders, one does not get the exact price at which they triggered their buy/sell button. It varies due to the market volatility and the broker’s execution speed. This could be in favor of or against the client.

Trading Range in USD/TWD

The trading range is a range of pip movement values in different timeframes. In simple terms, it tells the number of pips the currency pair has moved in a given timeframe. For example, if the minimum volatility value on the 1H timeframe is five pips, then it means that this pair moves at least five pips in about an hour or so. These values can be helpful in figuring the approximate P/L on a trade, even before placing the trade.

Procedure to assess Pip Ranges

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

USD/TWD Cost as a Percent of the Trading Range

From the above table, one may even determine the total cost variation in trade in different timeframes for different volatilities. With these values, we can, in turn, determine the ideal way to trade this currency pair.

ECN Model Account

Spread = 27 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 27 + 3 = 33

STP Model Account

Spread = 30 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 30 + 0 = 33

The Ideal way to trade the USD/TWD

The magnitude of the percentages in the table represents how high or low is the cost of the trade. It is proportional to the cost of the trade. In the below table, we can clearly see that the costs are high in the min column, depicting high costs for lower volatilities. Similarly, low costs for high volatilities.

Also, the costs are pretty high on lower timeframes compared to the higher timeframes. So, this definitely is not the best pair to trade for scalpers. With an investment point of view, it could prove to be the best pair irrespective of the timeframe you’re trading. Talking about a positional trader, it is ideal to trade during those times when the volatility of the market is around the average values.

Another simple way to bring your costs down is by placing limit or stop orders instead of market orders. This considerably brings down the cost of the trade as the slippage in such orders is nil.

Below is an example of the cost percentages when the slippage is made zero.

Spread = 30 | Slippage = 0 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 0 + 30 + 0 = 30

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Forex Assets

Trading Costs Involved While Trading The USD/PHP Forex Pair

Introduction

Introduction

Introduction

USD/PHP is the abbreviation for the US dollar versus the Philippine Peso. Since Philippine is involved in the pair, this classified under the Asian emerging pairs. In this pair, the USD is the base currency and the PHP is the quote currency.

Understanding USD/PHP

The current market price determines the price of PHP that is equivalent to one US dollar. It is simply quoted as 1 USD per X PHP. For example, if the price of this pair was 50.96, then around 51 pesos would be required to buy one US dollar.

Spread

The difference between the bid price and the ask price is referred to as the spread. This value a variable that varies from broker to broker as well as the type of execution model used by the brokers.

ECN: 3 pips | STP: 4 pips

Fees

The fee is a synonym for commission. It is levied on the ECN accounts only and not STP accounts.

Slippage

Slippage is some sort of a fee that is paid only on market orders. Slippage is the pip difference between the trader’s requested price and the price that was given by the broker. There is variation primarily due to two reasons – Market’s volatility & Broker’s execution speed

Trading Range in USD/PHP

Wanting to know how much could be your minimum average and maximum profit/loss of a trade in a given timeframe? Below is a table that will help you with it. With the pip movement values in the table, one can determine their risk on the trade. All you have to do is, multiply the volatility value with the pip value ($19.24). This will yield the value for one standard lot size.

 Procedure to assess Pip Ranges

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

USD/PHP Cost as a Percent of the Trading Range

Apart from the profit/loss in a trade, we can even determine the cost variation in altering volatilities. To do so, we have taken the ratio between the volatility value and the total cost and represented it as a percentage.

ECN Model Account

Spread =3 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 3+ 3 = 9

STP Model Account

Spread = 4 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 4 + 0 = 7

The Ideal way to trade the USD/PHP

Firstly, from the trading range table, we can infer that the volatility of this pair is feeble. But, note that, the small pip movement values do not mean you’ll have to trade large quantities to make a good profit. Since the pip value (per standard lot) is $19.24, even a 0.1 pip will generate $1.924.

Coming to the cost table, the percentages here are too high, especially in the min column. So it is recommended to not trade during low volatilities as It will have high costs. So, to reduce costs, it is ideal to trade when the volatility of the market is on the higher side. As far as the risk involved in highly volatile markets is concerned, you may cut down your lot sizes.

To simplify it even further, you can bring down your costs by executing your trades as limit/stop orders instead of market orders. This eliminates the slippage involved in the calculation of total costs on the trade.

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Forex Assets

Understanding The USD/INR Forex Currency Pair

Introduction

Introduction

Introduction

USD/INR is the abbreviation for the US Dollar against the Indian Rupee. This Asian pair is classified as an emerging currency pair. Here, the US Dollar is the base currency, and the INR is the quote currency.

Understanding USD/INR

The price in the market determines how much the Indian Rupee worth with respect to the US Dollar is. It is quoted as 1 USD per X INR. So, if the market price of USDINR is 71.46, then around ₹71 is required to purchase $1.

Spread

Spread in foreign exchange, is the difference between the bid and the ask price of the currency pair. This is the primary way through which brokers generate revenue. Spread is typically decided by the brokers itself. And it varies based on the type of execution model implemented by the brokers.

ECN: 19 pips | STP: 20 pips

Fees

Out of the two types of execution models, there is a fee, only on ECN accounts. Typically, there is no fee on STP accounts. However, this is compensated by higher spreads.

Slippage

Slippage is the difference between the price demanded by the user and the price he received by the broker. There is always this difference when orders are executed by the market. There are a couple of reasons for its occurrence.

  • Broker’s execution speed
  • Market’s volatility

Trading Range in USD/INR

The minimum, average, and maximum volatility of the currency pair in different timeframes are represented in the below trading range table. These values help us calculate the profit or loss that can be made in a given amount of time. Hence, this table is a great risk management tool.

 Procedure to assess Pip Ranges

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

USD/INR Cost as a Percent of the Trading Range

The costs as a percent of the trading range are the representation of the variation of the costs for different volatilities and timeframes. Understanding this cost variation helps in determining the ideal times of the day to trade this currency pair, which shall be discussed in the subsequent sections.

ECN Model Account

Spread = 19 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 19 + 3 = 25

STP Model Account

Spread = 20 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 20 + 0 = 23

The Ideal way to trade the USD/INR

Before getting into it, let’s first comprehend the below tables. The greater the values of the percentage, the greater is the cost of the trade. Similarly, the lower the values, the lesser is the total cost of the trade. Also, costs are inversely proportional to the volatility of the market.

From the above tables, we can ascertain that the values are higher in the min column, and gradually increases in the up to the max column. This means that the costs are high when the volatility of the market is low. The costs are neither too high nor too low for average volatility. Hence, if you are a trader who requires moderate volatility and low costs, then you may trade when the volatility of the market is around the average values.

Note: The current volatility of the market can be obtained from the ATR indicator.

There is another way through which one can considerably reduce their costs. By executing trades via limit/stop orders instead of market orders, the slippage on the trade will be waived off from the total costs. This brings down the costs significantly. For example, if the slippage on the trade is five pips, then five pips will be reduced in calculating the total costs on the trade.

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Forex Assets

Analyzing the USD/CNH Forex Currency Pair

Introduction

Introduction

Introduction

USDCNH is the tick symbol for the US Dollar versus the Chinese Yuan. This Asian currency pair is classified as an emerging currency pair. Here, the US Dollar is the base currency, and the CNH is the quote currency.

Understanding USD/CNH

The price of this pair as a whole determines the value of CNH equivalent to one USD. It is quoted as 1 USD per X CNH. For example, if the price of this pair currently is 6.4728, then these many Yuans are required to buy one US Dollar.

Spread

The spread is the difference between the bid price and the ask price of a currency pair. Since the bid and ask price is set by the brokers, spread varies from broker to broker. The approximate spread on ECN and STP accounts is given below.

ECN: 23 pips | STP: 24 pips

Fees

A fee is nothing but the commission that is paid to the broker on each trade. This, too, is different from broker to broker. The fee on STP accounts is nil, while there are few pips of fee for ECN accounts.

Slippage

Slippage is another type of fee which is applied for market orders. It is a pip difference between the price requested by the trader to be executed and the price that is actually given to the trade. There is this difference due to the market’s volatility and the broker’s execution speed.

Trading Range in USD/CNH

With the table given below, one can assess their risk on each trade. This table represents the range of pip values from minimum to maximum for different timeframes. Multiplying this with the value per pip yields the amount one will be risking on their trade.

Procedure to assess Pip Ranges

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

USD/CNH Cost as a Percent of the Trading Range

The trading range values can be used to determine the variation in the costs of the trade for different volatilities as well. Below are two tables (for ECN and STP) that depict how the cost varies as the volatility and timeframes are changed.

ECN Model Account

Spread = 23 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 23 + 3 = 29

STP Model Account

Spread = 24 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 24 + 0 = 27

The Ideal way to trade the USD/CNH

This currency pair is a little, unlike the other emerging currency pairs. As in, it has pretty good liquidity and volatility. It is comparable to a cross-currency pair. So, it can be traded in a similar way how to cross currencies are traded.

From the table, we can ascertain that the magnitude of the percentages is higher for lower volatilities and comparatively lower for high volatilities. And the median costs lie in an average column.

If you are a trader who requires low costs, then you will have to bear with the high volatility. Or if you’re a trader who needs low volatility, then you must be able to bear with high costs. Finally, traders who wish to have a balance between the two, then they may trade during those times when the volatility is around the average values (in the trading range table).

Inculcating strategies that require limit order and not market orders can help reduce costs significantly. This is because limit orders do not consider the slippage factor in calculating the total costs. That is, in our example, the total cost of each trade would reduce by three pips.

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Forex Assets

Assessing The USD/UAH Exotic Forex Currency Pair

Introduction

Introduction

USD/UAH is the abbreviation for the currency pair US dollar against the Ukrainian Hryvnia. It is classified as an emerging currency pair. The volatility, liquidity, and volume in this pair, is significantly low. In this pair, the US dollar is the base currency, and UAH is the quote currency.

Understanding USD/UAH

The value of the pair as a whole represents the value of UAH that is equivalent to one US dollar. It is quoted as 1 USD per X UAH. For instance, if the value of USDUAH is 24.19, then about 24 Hryvnias are required to purchase one US dollar.

Spread

The difference between the bid price and the ask price is referred to as the spread. Spread usually varies from broker to broker, and also on the execution model used by the brokers.

ECN: 20 pips | STP: 23 pips

Fees

As the name pretty much suggests, the fee is the charge paid to the broker on each trade. Below is the fee on ECN and STP accounts.

ECN – 5-10 pips | STP – 0 pips

Slippage

Due to the changes in the volatility and the broker’s execution speed on the trade, a trader does not get the exact price he needed. And the difference between the two prices is called slippage.

Trading Range in USD/UAH

Risk management is a vital factor in trading. The trading range is a tabular representation of the pip movement in a currency pair in different timeframes. And these values help in determining the gain or loss on a trade.

Note: The product of the pip movement value and the pip value (per standard lot) yields the profit/loss in a trade for a particular timeframe.

Procedure to assess Pip Ranges

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

USD/UAH Cost as a Percent of the Trading Range

The total cost of a trade is determined by the sum of the spread, slippage, and the trading fee. And this varies from time to time, based on the volatility of the market. Below are the tables that represent the costs for different volatilities and timeframes.

ECN Model Account

Spread = 20 | Slippage = 3 |Trading fee = 5

Total cost = Spread + Slippage + Trading Fee = 20 + 3 + 5 = 28

STP Model Account

Spread = 23 | Slippage = 3 |Trading fee = 5

Total cost = Spread + Slippage + Trading Fee = 23 + 3 + 5 = 31

The Ideal way to trade the USD/UAH

Firstly, the percentage values depict the cost variation on the trade. The magnitude of the percentage is directly proportional to the cost of the trade.

We can see that the minimum pip movement in 1H, 2H, and 4H timeframe is 0 pips. So, it is pointless to trade in the lower timeframes. However, one may trade this pair on the higher timeframes, like the 1D, 1W, and 1M. To reduce costs even further and to have decent volatility, one may preferably trade when the volatility of the market is above the average values.

Furthermore, limit orders is another way through which a trader can bring down their costs considerably. This is because limit orders, unlike the market orders, do not have any slippage on it. For instance, the total cost on an ECN account for limit orders would be,

Total cost = Spread + Slippage + Trading Fee = 20 + 0 + 5 = 25

Corollary

We can see that on average volatilities, it almost takes a week range to cover the costs if the trade goes in the direction of the trade.  That means this pair is unsuitable to trade short-term. The use of limit orders to catch the price entry at the absolute minimum of the week, combined with ultra-reliable timing, is the only way to succeed. There are lots of better pairs to choose from.

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Forex Assets

Asset Analysis – USD/RON Forex Exotic Currency Pair

Introduction

Introduction

Introduction

USDRON is the abbreviation for the US Dollar against the Romanian Leu. This pair comes under the roof of emerging currency pairs. The volume in this pair is pretty low, and the volatility is high. Here, the US Dollar is referred to as the base currency and the RON the quote currency.

Understanding USD/RON

The fluctuating price in the exchange market specifies the value of RON equivalent to one USD. It is quoted as 1 USD per X RON. For instance, if the market price of this pair is 4.4723, then about 4½ RON is required to buy one US Dollar.

Spread

Spread is the difference between the bid and the ask prices set by the broker. It is not the same with all brokers. It also varies from the type of execution model used by the broker.

ECN: 19 pips | STP: 21 pips

Fees

The fee is the commission that is paid to the broker on each position you take. This, too, varies from the type of execution model. Typically, there is no fee on STP accounts. However, there are a few pips of fee on ECN accounts.

Slippage

Slippage is the difference between the price requested by the client and the price he actually got from the broker. This happens only on market orders. The primary reasons for its occurrence are,

Market’s volatility

Broker’s execution speed

Trading Range in USD/RON

A trading range is the representation of the pip movement in a currency pair for different timeframes. With these values, we can determine the gain or loss in a trade for a specified time frame. All that must be done is, multiply the required value from the below table with the pip value. This will yield the profit/loss for one standard lot.

Procedure to assess Pip Ranges

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

USD/RON Cost as a Percent of the Trading Range

Apart from assessing the profit or loss on a trade, we can also determine how the cost varies as the volatility changes. Below is a tabular representation of the same.

ECN Model Account

Spread = 19 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 19 + 3 = 25

STP Model Account

Spread = 21 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 21 + 0 = 24

The Ideal way to trade the USD/RON

Trading emerging currency pairs is different from trading major and e pairs. This pair’s high volatility and low trading volume make it infeasible to trade any time during the day. So let’s take some info out from the above tables and try finding the ideal times to enter this pair.

From the table, it can be ascertained that the percentage values are high in the min column and pretty low in the max column. This means that the total costs on the trade increases as the volatility decreases. So, to have equilibrium between the two, it is perfect to enter during those times when the volatility is around the average values. This will ensure both sufficient volatility and affordable costs.

Another simple technique to reduce total costs is by trading using limit and stop orders instead of market orders. In doing so, the total costs will reduce significantly as the slippage will not be considered for limit/stop orders. The reduction in the costs is represented in the below table as follows.

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Forex Assets

Analyzing The USD/EGP Exotic Forex Currency Pair

Introduction

Introduction

Introduction

USDEGP is the abbreviation for the US Dollar against the Egyptian Pound. The USDEGP is classified under the emerging currency pairs, and the volatility in these pairs is quite high. In this pair, the US Dollar is the base currency and the EGP the quote currency.

Understanding USD/EGP

The price of USDEGP specifies the value of EGP equivalent to one USD. It is quoted as 1 USD per X EGP. So, if the market price of this pair is 15.673, then 15.673 units of EGP are required to purchase one US Dollar.

Spread

The difference between the bid and ask price is referred to as the spread. This value varies from broker to broker as well as how they execute the trade. The approximate spread on ECN and STP accounts is shown below.

ECN: 20 pips | STP: 21 pips

Fees

The fee is a commission that is to be paid to the broker for each trade you execute on an ECN account. On STP accounts, the fee is nil.

Slippage 

The price you receive from the broker is usually different from the price when you executed. And the difference between these two prices is referred to as the slippage. The factors affecting slippage include,

  • Market’s volatility
  • Broker’s execution speed

Trading Range in USD/EGP

The trading range is a tabular representation of the pip movement in a currency pair for different timeframes. With it, one can assess their risk on the trade for each given timeframe.

Procedure to assess Pip Ranges

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

USD/EGP Cost as a Percent of the Trading Range

As the name pretty much suggests, this is a trading range table that represents cost variations (in terms of percentage) for different timeframes and volatilities. These values are useful in determining the ideal times of the day to trade this pair.

ECN Model Account

Spread = 20 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 20 + 3 = 26

STP Model Account

Spread = 21 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 21 + 0 = 24

The Ideal way to trade the USD/EGP

In emerging currencies, the volatility is high, and the traded volume is low. So is it not ideal to enter the market any time during the day. So, let’s interpret the above tables and find the best times of the day to trade this currency pair.

The magnitude of the percentage is directly proportional to the cost of the trade. And since the percentage is higher in the min column, we can conclude that as the volatility increases, the cost reduces. However, our main aim is not only to reduce costs but to have good volatility and trading volume as well. Hence, to ensure both, it is ideal to trade when the volatility is at/above the average values in the volatility table.

Moreover, one can bring their costs slightly lower by trading using limit orders instead of market orders. This will cut off the slippage on the total cost of the trade. An example of the same is given below.

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Forex Assets

Understanding The USD/PLN Exotic Currency Pair

Introduction

Introduction

Introduction

USD/PLN is the abbreviation for the US dollar against the Polish Zloty. It is an emerging currency pair in the forex market. The volatility in this pair is high, and the trading volume is less compared to major and cross currencies. In this pair, USD is the base currency, and PLN is the quote currency.

Understanding USD/PLN

The value of this pair determines the value of PLN that is equal to one US dollar. It is quoted as 1 USD per X PLN. For example, if the value of this pair is 3.8146, then around 4 PLN is required to buy one USD.

Spread

In forex, one of the most used terms is the spread. Spread is the difference between the bid price and the ask price of the market. This value is decided by the broker and varies from the type of account model.

ECN: 18 pips | STP: 21 pips

Fees

There is some fee on every trade you execute. And this, too, varies from type of account model. For instance, there is no fee on the STP account and a few pips on ECN accounts.

Slippage

Slippage occurs only on market orders. By definition, it is the difference between the trader’s required price for execution and the actual price the order was executed. This value depends on the broker’s execution speed and the market’s volatility.

Trading Range in USD/PLN

Assessing the profit that you can make and the loss that you can incur is a vital risk management tool. And below is a table that represents the minimum, average, and maximum volatility in different timeframes, which will help determine profit/loss values.

Procedure to assess Pip Ranges

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

USD/PLN Cost as a Percent of the Trading Range

An excellent application to the above table is the cost as a Percent of the Trading Range. The below tables illustrate how the cost varies based on the volatility of the market. And these values will help us an idea on the best times of the day to enter into this currency pair.

ECN Model Account

Spread = 18 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 18 + 3 = 24

STP Model Account

Spread = 21 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 21 + 0 = 24

The Ideal way to trade the USD/PLN

Before getting right into it, let us comprehend what the tables actually mean. The higher the value of the percentage, the higher is the cost of the trade and vice versa. From the table, we can clearly ascertain that the percentages are high in the first (min) column, indicating that the costs are high when the market volatility is low.

Now, talking the ideal time to trade this currency pair, you may trade this pair during those times when the volatility is above the average values. In doing so, you will be assured with sufficient volatility and low costs as well.

Furthermore, if you wish to reduce your costs much more, you may place orders using the limit/stop instead of the market. This will completely nullify the slippage on the trade and will, in turn, bring down the total costs significantly. As an example, the above table, when the slippage is made, is nil is illustrated below.

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Forex Assets

Analyzing The USD/NOK Exotic Forex Currency Pair

Introduction

Introduction

Introduction

USD/NOK is the abbreviation for the US Dollar against the Norwegian Krone. This pair comes under the classification of exotic currency pairs. In this pair, USD is the base, and NOK is the quote currency.

Understanding USD/NOK

The value of USDNOK determines the value of NOK that is equivalent to one US Dollar. It is quoted as 1 USD per X NOK. So, if the market value of this pair is 9.2913, then these many units of Norwegian Krone are required to buy one US Dollar.

Spread

Spread is the difference between the bid price and the ask price in the market. This difference is the revenue for the brokers. Spread typically varies on how the broker executes the trades. The approximate spread on ECN and STP accounts is given below.

ECN: 13 pips | STP: 15 pips

Fees

The commission that a broker charges their clients is referred to as the fee. This is not constant and varies from broker to broker. The fee on ECN accounts is around 5-10 pips, and on STP accounts, it is nil.

Slippage

Slippage is the difference between the trader’s demanded price and the actual executed price. Market volatility and the broker’s execution speed are the reasons for slippage to occur.

Trading Range in USD/NOK

A trading range is the tabular representation of the minimum, average, and maximum pip movement in a currency pair. Below are the values of USDNOK that help us assess the profit/loss one can incur in a trade.

Procedure to assess Pip Ranges

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

USD/NOK Cost as a Percent of the Trading Range

Here we take the ratio of the total cost on the trade and the volatility values and represent them in percentages. These percentages are then used to determine the cost variation in trade in different timeframes.

ECN Model Account

Spread = 13 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 13 + 3 = 19

STP Model Account

Spread = 15 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 15 + 0 = 18

The Ideal way to trade the USD/NOK

In this section, we interpret what the above percentages actually mean and how to make use of it.

The magnitude of the percentages represents how high or low are the costs of trade. So the higher the values, the higher is the cost and vice versa. From the table, it can be ascertained that the costs are pretty on the higher in the min column. This means that the costs are high when the market’s volatility is low. But it is not ideal to trade during these times due to high costs.

To have an equilibrium on costs as well as volatility, it is perfect for entering during those times when the volatility of the current market is around the average values.

Now, if you still wish to reduce your costs, you may trade using limit orders instead of market orders. This will completely nullify the slippage on the trade and hence bring down the total cost as well.

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Forex Assets

Everything About The USD/MXN Forex Currency Pair

Introduction

Introduction

Introduction

USDMXN is the abbreviation for the US Dollar against the Mexican Peso. It is classified as an exotic currency pair that usually has high volatility and low trading volume. Here, the US Dollar (on the left) is the base currency, and the MXN (on the right) is the quote currency.

Understanding USD/MXN

The market price of USDMXN represents the value of MXN that are required to purchase to one US Dollar. It is quoted as 1 USD per X MXN. So, if the market price of this pair is 18.7615, then this amount of MXN is required to buy one USD.

Spread

The difference between the bid and the ask price is referred to as the spread. Its value varies from the type of execution model of the broker.

ECN: 16 pips | STP: 17 pips

Fees

For every position a client takes from the broker, he must pay some fee on each. Note that there is no fee on STP accounts. However, there are few pips of fees on ECN accounts.

Slippage

The difference between the price requested by the client and the price that was given by the broker is referred to as the slippage. Its value depends on the volatility of the market and the broker’s execution.

Trading Range in USD/MXN

Assessing the amount of money you will win and lose beforehand, in a particular timeframe is critical in trading. Below is a volatility table through which one can determine the minimum, average, and maximum profit/loss they can encounter in a specified timeframe.

Procedure to assess Pip Ranges

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

USD/MXN Cost as a Percent of the Trading Range

By applying the total cost to the above table, we can even determine the cost variation in a trade. The ratio between the two expressed in percentage will help us determine the ideal times of the day to trade the currency pair.

ECN Model Account

Spread = 16 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 16 + 3 = 22

STP Model Account

Spread = 17 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 17 + 0 = 20

The Ideal way to trade the USD/MXN

Comprehending the above tables is simple. The percentage values are directly proportional to the total cost of the trade. It is seen that the percentages are comparatively high on the min column and vice versa. Now, coming to the ideal time to enter the market, it would be when the volatility of USDMXN is somewhere around the average pip movement. Trading in such moments will ensure low costs as well as lower liquidity.

Furthermore, you reduce costs by placing orders using limit/pending orders instead of market orders. This will significantly bring down the total costs as the slippage will be zero at this point in time. I hope this article will help you trade this pair in a much efficient way. Cheers!

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Forex Assets

Understanding The Trading Costs Involved In USD/TRY Exotic Currency Pair

Introduction

Introduction

Introduction

USDTRY, an exotic currency pair, is the abbreviation for the US Dollar against the Turkish Lira. One can expect high volatility in these pairs. Here, the US Dollar is called the base currency and TRY the quote currency.

Understanding USD/TRY

The value of USDTRY depicts the value of TRY equivalent to one USD. It is quoted as 1 USD per X TRY. So, if the market value of this pair is 5.9878, then 5.9878 Liras are required to buy one US Dollar.

Spread

Spread is the difference between the bid price in the market and the ask price in the market. These prices are set by the brokers. Hence, the prices from each broker differ. Moreover, it varies from the type of execution as well.

ECN: 12 pips | STP: 14 pips

Fees

The commission that you pay to your broker for taking a position in a currency pair is a fee on the trade. This, too, depends on the type of execution model. There is typically no fee on STP accounts. And on ECN accounts, there are a few pips of fees.

Slippage

Slippage is the difference between the trader’s requested price and the broker’s executed price. It depends on two factors, namely, the broker’s execution speed and market volatility.

Trading Range in USD/TRY

The trading range is the range of the pip movement in a currency pair on different timeframes. With it, traders can determine their minimum, average, and maximum risk on a trade in a specified time frame.

Procedure to assess Pip Ranges

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

USD/TRY Cost as a Percent of the Trading Range

Apart from knowing how many pips the market moves in a given timeframe, it is also necessary to understand the total cost variation in a trade. And below are two tables (for ECN and STP) that will help determine the best time of the day to trade in the currency pair with reduced costs.

ECN Model Account

Spread = 12 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 12 + 3 = 18

STP Model Account

Spread = 14 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 14 + 0 = 17

The Ideal way to trade the USD/TRY

The costs on major currencies are pretty low, and the volatility is great. So it is ideal to enter any time in the market to trade these pairs. But, when it comes to exotic pairs, the volatility, as well as the costs, are quite high. Hence, one must be aware of when exactly they should trade these currencies.

The percentages in the above tables are directly proportional to the volatility of the market. Hence, we can conclude that costs are when the volatility is low and vice versa.

To determine the ideal times of the day to trade, you must glance at the volatility table and check if the current volatility if nearby the average values mentioned in the tables. If they are more or less in that range, you are good to trade that currency pair because this will assure a balance between both volatilities as well as costs.

Also, another simple way to reduce costs is by getting rid of the slippage on the trade. This can be done by executing orders using limit orders instead of market orders. In doing so, the total costs will reduce by a significant amount, and so will the cost of the trade.

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Forex Assets

Trading The USD/SEK Exotic Forex Currency Pair

Introduction

Introduction

Introduction

USDSEK, the US Dollar against the Swedish Krona, is an exotic currency pair in the forex market. USD is called the base currency and SEK the quote currency. Coming under the classification of exotic pairs, the volatility in this pair is pretty high.

Understanding USD/SEK

The value of USDSEK represents the quantity of SEK that is required to purchase one US Dollar. It is quoted as 1 USD per X SEK. So, if the current of this pair is 9.6123, then these many units of Swedish krona are required to buy one US Dollar.

Spread

Spread is the difference between the bid price and the ask price set by your broker. It varies from each broker. It also varies on how they execute the trade as well.

ECN: 12 pips | STP: 14 pips

Fees

There is some fee associated with each trade you take in the market. The fee, too, varies from broker to broker and the type of execution model.

Fee on ECN – 5-10 pips

Fee on STP – 0

Slippage

Slippage is the algebraic difference between the price needed by the client and the price the broker actually gave him. There is this difference due to the market’s volatility and the speed of execution of the trade. Note that slippage is quite high on exotic pairs.

Trading Range in USD/SEK

The below table is the representation of the minimum, average, and maximum pip movement on the USDSEK pair. These values help us assess the gain that can be made or loss that can be incurred in a trade in a given timeframe.

Procedure to assess Pip Ranges

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

USD/SEK Cost as a Percent of the Trading Range

An application to the above table is the cost variation in a trade. By calculating the ratio between the total cost and the volatility values, we can determine the perfect times of the day to trade in the market. The comprehension of it is discussed in the upcoming topics.

ECN Model Account

Spread = 12 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 12 + 3 = 18

STP Model Account

Spread = 14 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 14 + 0 = 17

The Ideal way to trade the USD/SEK

Trading exotic currency pairs are different from trading major and minor currency pairs because volatility and volume are different. And when it comes to costs, the costs are higher in exotic pairs compared to major and minor pairs.

The magnitude of the percentage depicts the costs on the trade and is proportional to it. High values in the min column tell that the costs are high when the market volatility is low and vice versa.

To have sufficient volatility with affordable costs, one may trade those times when the volatility is around the average values.

Moreover, limit orders also help in reducing the costs by a significant amount. This is because only market orders have slippage, and limit orders don’t. Hence, cutting off slippage from the total costs will reduce the costs of the trade considerably.

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Forex Assets

USD/DKK – Analyzing the Exotic Forex Pair

Introduction

Introduction

Introduction

USD/DKK is the abbreviation for the US Dollar against the Danish Krone. This pair is considered as an exotic currency pair that typically presents high volatility and low trading volume. The US Dollar is the base currency, and the Danish Krone is the quote currency.

Understanding USD/DKK

The value of USD/DKK represents the value of DKK that is equivalent to one US Dollar. It is quoted as 1 USD per X DKK. So, if the current value of this pair is 6.9868, then these many Danish Krones are required to purchase one US Dollar.

Spread

Spread is the difference between the bid and the ask price of a currency pair. It is the primary way through which brokers generate revenue. It varies from broker to broker and also the model of execution.

ECN: 14 pips | STP: 15 pips

Fees

The fee is simply the commission that you pay on each trade you take.

Fee on ECN – 3-6

Fee on STP – 0

Slippage

Slippage is the difference between the price which was intended by the client and the price he got from the broker. This difference changes with the market’s volatility and the broker’s execution speed. Slippage on exotic pairs is typically high.

Trading Range in USD/DKK

As it is pretty evident from the table, the trading range is an illustration of the pip movement in a currency pair in different timeframes. These values help us determine the minimum, average, and maximum profit or loss that can be incurred in a trade during a specified time frame. Another application for this table is discussed in the next topic.

Procedure to assess Pip Ranges

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

USD/DKK Cost as a Percent of the Trading Range

Cost as a percent of the trading range is an application to the above volatility table. The below two tables depict the total cost variation in different volatilities and timeframes for ECN and STP accounts.

Note: The percentages are obtained by finding the ratio between the total cost and the pip movement values in the above table.

ECN Model Account

Spread = 14 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 14 + 3 = 20

STP Model Account

Spread = 15 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 15 + 0 = 18

The Ideal way to trade the USD/DKK

What do the percentage values mean? Comprehending the above tables is simple. The higher the magnitude of the percentage, the higher are the costs for that particular volatility and timeframe. Similarly, lower percentage values mean that the costs are low.

Trading during high volatilities or when the cost is high is not ideal. So, to ensure an equilibrium between the two, it is best to enter the market during those times when the volatility is around the mid values illustrated in the volatility table.

Apart from this, one can reduce their total costs significantly by placing orders using limit/pending orders instead of market orders. This will altogether remove the slippage factor on the total cost and bring down its value by a high number.

As already mentioned, exotic currency pairs are highly volatile and have low trading volume. This results in higher costs on the trade. Hence, if you really want to trade this pair, it is recommended to follow the above-mentioned mentioned techniques to reduce costs by a considerable amount. Cheers!

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Forex Assets

Understanding The USD/THB Exotic Forex Pair

Introduction

Introduction

Introduction

USD/THB is the abbreviation for the US Dollar versus Thailand’s Thai Baht. It is an exotic currency pair which usually has high volatility and low trading volume. US Dollar, in this pair, is the base currency, and the Thai Baht is the quote currency.

Understanding USD/THB

The value of USDTHB represents the number of THB that are equivalent to one USD. It is quoted as 1 USD per X THB. So, if the market price of this pair is 30.98, then one has to produce 30.98 THB to buy one USD.

Spread

Spread is the difference between the bid and the ask price of the currency pair set by the brokers. It typically varies from broker to broker and also from the type of order execution. The spreads on ECN and STP accounts are as shown below.

ECN: 10 pips | STP: 11 pips

Fees

There is a fee associated with every trade you take. The fee is also referred to as the commission on the trade. Its value is usually a constant but varies from the type of execution model. The fee on STP accounts is nil, while there are a few pips of fee on ECN accounts.

Slippage

Slippage is the difference between the trader’s required price and the price at which his trade was executed. Since exotic pairs are highly volatile, the slippage is quite high.

Trading Range in USD/THB

Below we shoe a table representation of the minimum, average, and maximum pip movement in a currency pair. These values help us determine the profit or loss that can be made on a trade in a given amount of time. All you have to do is, multiply any one of the below values with the value per pip ($32.26). The result is the potential profit gained or lost on the trade for one bar of the timeframe.

Procedure to assess Pip Ranges

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

USD/THB Cost as a Percent of the Trading Range

The cost as a trading range represents the cost variation in trade in different volatilities of the market. It is presented in percentages of the total range. Thus, it helps determine the best moments to enter the market to ensure lower costs.

ECN Model Account

Spread = 10 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 10 + 3 + 3 = 16

STP Model Account

Spread = 11 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 11 + 3 + 0 = 14

The Ideal way to trade the USD/THB

Trading exotic pairs are different from trading the major and minor pairs. However, there are times when one can trade this pair by making attempts to reduce the costs.

The magnitude of the percentages represents the costs of the trade. The higher the percentages, the higher are the costs on the trade. It can be seen from tables that the costs are high on the min column and comparatively lower in the max column. This clearly means the costs are high during high volatilities and vice versa.

However, when it comes to determining the right time to trade, one must trade during those moments when the volatility is around the higher values because this will ensure pretty great volatility as well as low costs.

Furthermore, another simple way to reduce costs is by trading using limit/stop orders instead of market orders. Limit orders will eliminate the slippage and significantly reduce the total cost of the trade.

Finally, we can see that we must be pretty sure of the direction and extension of the trend to trade the USDTHB, and avoid trading it intraday. Using the daily chart and limit orders, we still would need almost 4 Hours of a positive movement (with the trade) to pay the costs. Therefore we practical setups would ask for at least 2-3 days of market action for propper reward-to-risk factors.

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Forex Assets

Analyzing The USD/SGD Forex Currency Pair

Introduction

Introduction

Introduction

US dollar versus the Singapore dollar, in short, is referred to as USDSGD. USD stands for the US dollar and is the base currency, and SGD stands for the Singapore dollar and is the quote currency. This currency pair comes under the sack of exotic currency pairs. Unlike the major and minor currencies, exotic currencies tend to have high volatility and low volumes.

Understanding USD/SGD

Comprehending the value of USDSGD is simple. The number of SGD equivalent to one USD is the value of the currency pair USDSGD. It is quoted as 1 USD per X SGD. So, if the value of this pair is 1.3641, then 1.3241 units of SGD are to be produced to purchase one USD.

Spread

Spread is a term given to the difference between the bid price and ask price of a currency pair. This value varies from broker to broker and on the type of execution model.

ECN: 7 | STP: 9

Fees

The fee is similar to the commission that is paid on each trade. This value, too, varies based on how the brokers execute a trade. Note that there is no fee on STP accounts. However, there is a fee on ECN accounts. And for exotic pairs, the fee is pretty high.

Slippage

Slippage is the difference between the price that a trader expected to receive and the price he actually got. There is always this difference due to the volatility of the market and the broker’s execution speed.

Trading Range in USD/SGD

Assessing the profit or loss that a trader is liable for is considered to be a vital factor in trading. This can easily be determined using the table below, which represents the pip movements in the currency pair in a given timeframe.

Procedure to assess Pip Ranges

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

USD/SGD Cost as a Percent of the Trading Range

The total cost on a trade does not remain static even though you’re trading with the same broker. It varies depending on the volatility of the currency pair. To find the variation of these costs, we consider the values in the pip movement table and find the ratio with the total cost, and represent in percentage.

ECN Model Account

Spread = 7 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 7 + 3 + 3 = 13

STP Model Account

Spread = 9 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 9 + 3 + 0 = 12

The Ideal way to trade the USD/SGD

As mentioned, exotic pairs are pretty expensive to trade. However, it can still be traded in some moments when the costs are low.

It can be ascertained from the above table that the percentages are maximum in the min column and minimum on the max column. This means that the costs are high when the market’s volatility is low and vice versa.

Now, to ensure moderate volatility with affordable costs, it is ideal to trade when the volatility of the market is somewhere around the average values of the volatility table.

Slippage is a variable in the total cost that can be erased by trading using limit orders instead of market orders. In doing so, the costs will be reduced by a significant value. For example, if the total cost on the trade was 13 (including slippage=3), then the costs would be reduced to 10 as slippage is not considered.

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Forex Assets

What Should You Know Before Trading The CHF/JPY Currency Pair

Introduction

Introduction

Introduction

CHFJPY is a symbolic representation of the Swiss franc against the Japanese yen. Here, CHF is the base currency, and JPY is the quote currency. Since it does not have USD involved, it is classified as a cross-currency pair.

Understanding CHF/JPY

The market price of this pair is the number of JPY that are required to purchase one CHF. It is quoted as 1 CHF per X JPY. For example, it’s current value is 112.31, then 112.31 yen are needed to buy one Swiss franc.

Spread

Spread in forex is the difference between the bid price of a currency and the ask price of it. And this pip difference is used up by the brokers as a form of fee. However, it is not a fixed value. It varies from brokers to brokers.

ECN: 1.3 | STP: 2.1

Fees

Spread is not the only form of fee that is levied by the brokers. There is a commission on the trade as well. The commission is nil on STP accounts, but pips on ECN accounts.

Slippage

When entering a trade using market orders, the trader does not get the exact price he intended when he executed it. There might be a difference in pips. This difference is referred to as slippage. Slippage may be in favor of or against the trader.

Trading Range in CHF/JPY

The trading range is simply a representation of the minimum, average, and maximum pip movement in a currency pair. With these values, one can assess how much money a trader will be risking in a particular timeframe. For example, if the average pip movement on the 4H in this pair is 15 pips, then a trader can expect to win or lose $150.6 in about 4H or so.

Procedure to assess Pip Ranges

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

CHF/JPY Cost as a Percent of the Trading Range

Apart from knowing the profit or loss can one can incur in a given timeframe, it is necessary to assess the cost of these trades as well. Below is a table that represents the cost variation in different volatilities. And these costs are determined by finding the ratio between the total cost and the volatility.

ECN Model Account

Spread = 1.3 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 1.3 + 1 = 4.3

STP Model Account

Spread = 2.1 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 2.1 + 0 = 4.1

The Ideal way to trade the CHF/JPY

The forex market is open 24hours. However, it is not ideal to enter the market at any time. There are times when the costs are low, and times when it’s high.

The percentages in the table are directly proportional to the costs of the trade. It is seen that the percentages are high in the minimum column, and low in the maximum column. Hence, we can conclude that costs are inversely proportional to the volatility of the market. Now, when it comes to choosing the right time to trade, it is best to enter during those times when the volatility of the market is around the average values. This will ensure enough volatility in the market and low costs as well.

In addition, placing orders using limit/pending orders reduces costs too because this will completely nullify the slippage on the trade and will bring down the total cost significantly.

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Forex Assets

Analyzing The CAD/JPY Forex Asset Class

Introduction

Introduction

Introduction

CADJPY is the abbreviation for the currency pair, the Canadian dollar against the Japanese yen. This pair is one of the most extensively traded cross currency pairs. In CADJPY, CAD is referred to as the base currency and JPY as the quote currency.

Understanding CAD/JPY

The value of CADJPY is the value of JPY, which is required to purchase one CAD. It is quoted as 1 CAD per X JPY. For example, if the current market price of this pair is 82.651, then these many units of Japanese yen are needed to buy one Canadian dollar.

Spread

The bid price is the price used to sell a currency, and ask price is the price used to buy a currency. There is always a difference between the two prices. This difference is called the spread. It varies from broker to broker and also the type of their execution model.

ECN: 1.1 | STP: 2

Fees

Similar to stockbrokers, there are forex brokers who charge a few pips of fee on each position a trader opens and closes. This fee is no different from the commission brokers levy. On STP accounts, the fee is nil, while on ECN accounts, it is between 6-10 pips depending on the broker one is using.

Slippage

Slippage in trading is the difference between the price requested by the trader and the price he actually received. The two factors responsible for slippage are,

  • The volatility of the market
  • Broker’s execution speed

Trading Range in CAD/JPY

A trading range is a tabular representation of the number of pips a currency pair moved in a given timeframe. It represents the minimum, average as well as the maximum pip movement in six different timeframes. These values prove to be important for assessing one’s risk on a trade. For example, if the minimum pip movement in CADJPY on the 4H timeframe is ten pips, then a trader can expect to lose $917 in about 4H.

Procedure to assess Pip Ranges

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

CAD/JPY Cost as a Percent of the Trading Range

As already mentioned, there is a fee for every trade you take. And knowing the percent fee on the trades you are taking is important, as it depends on the volatility of the market and the timeframe you are trading.

Below is a representation of the total cost variation on trade in terms of percentages. Since costs on ECN accounts are different from STP accounts, we have two separate tables for this concept.

ECN Model Account

Spread = 1.1 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 1.1 + 1 = 4.1

STP Model Account

Spread = 2 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 2 + 0 = 4

The Ideal way to trade the CAD/JPY

Before getting right into it, let us comprehend the above tables. The higher the values of the percentages, the higher are the costs on the trade. It is pretty evident from the table that, percentage values are on the higher side in the min column and comparatively lower in the max column. This means that the costs are high when the volatility of the market is low and vice versa. Also, the trades that are taken based on a long term perspective, the costs are considerably low.

One may trade the high volatility markets to minimize your costs, or trade during low volatility by paying high costs. However, it is ideal to enter during those times of the day when the volatility is close to the average values. During these times, one can expect comparatively low costs with enough volatility as well.

On a further note, another simple and effective way to reduce costs is by trading using limit orders. This entry method will take slippage out of the total costs and bring down its value considerably. An example of the same is given below.

Spread = 2 | Slippage = 0 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 0 + 0 = 2

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Forex Assets

Fundamentals Of CAD/CHF Forex Currency Pair

Introduction

Introduction

Introduction

CAD/CHF is a currency pair where two currencies, namely, the Canadian dollar and the Swiss franc, are involved. It is a cross-currency pair. Here, CAD is called the based currency, and CHF is called the quote currency.

Understanding CAD/CHF

The current market price of CADCHF tells the value of CHF equivalent to one CAD. It is represented as 1 CAD per X CHF. For example, if the value of CADCHF in the market is 0.7372, then one must pay 0.7372 Swiss francs to buy one Canadian dollar.

Spread

In simple terms, the spread is the difference between the bid price and the ask price set by the brokers. It is not a fixed value and differs from time to time and broker to broker. It also varies based on the type of execution model.

ECN: 1 | STP: 2

Fees

The fee is the commission that is levied by the broker on each trade a trader takes. This, too, like the spread, differs from broker to broker and the type of their execution model. Fee on ECN accounts is 6-10 pips, while it is nil on STP accounts.

Slippage

Slippage is the difference between the trader’s executed price and the price he actually received from the broker. There is always this difference due to the volatility of the market and the broker’s trade execution speed. Note that slippage only happens on market orders.

Trading Range in CAD/CHF

Apart from analyzing the direction of the market, one must predetermine their risk and reward based on the volatility and the timeframe. Knowing how much a trader will gain or lose in a given time frame is a vital trade management tool. And below is a table through which one can determine their profit/loss that can be made in a specified timeframe. For example, the average pip movement on the 1H timeframe is 6.8. So, a trader can expect to be in a profit of $68.34 or in a loss of the same amount.

Procedure to assess Pip Ranges

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

CAD/CHF Cost as a Percent of the Trading Range

An application to the above volatility table is to find the cost differences on trades by considering the volatility and the total cost on a trade. Below is the table that illustrates the variation in cost on a trade, in terms of percentage. The comprehension of it is discussed in the subsequent topic.

ECN Model Account

Spread = 1 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 1 + 1 = 4

STP Model Account

Spread = 2 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 2 + 0 = 2

The Ideal way to trade the CAD/CHF

The higher the magnitude of the percentage, the higher is the cost of the trade.

The values in the table are least in the min column and highest in the max column. This simply means that the costs are high when the volatility of the market is low and vice versa.

In the average column, the values are not as low as in the max column, and not as high as in the max column. The volatility here is moderate too. Hence, this becomes our ideal time of the day to trade in the market.

To sum it up, one must trade during those times of the day when the volatility is more or less near the average values. This will ensure decent volatility as well as minimal costs.

There is another simple technique to reduce costs on trade. When trades are executed using limit order instead of market orders, the slippage becomes nil. So, this brings down the total cost of the trade by a significant value.

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Forex Assets

What Should Know About The AUD/JPY Currency Pair?

Introduction

Introduction

Introduction

AUDJPY is the abbreviation for the Australian dollar and the Japanese yen. It commonly referred to as “Aussie yen.” It is one of the cross-currency pairs in the forex market. AUD, being on the left, is termed as the base currency and JPY as the quote currency.

Understanding AUD/JPY

The market price of AUDJPY corresponds to the value of JPY that needs to be paid to buy one AUD. It is quoted as 1 AUD per X JPY. For example, if the value of AUDJPY is 74.571, then these many units of the yen are to be produced to purchase one Australian dollar.

AUD/JPY Specification

Spread

Spread is the medium through which brokers generate their revenue. They set different prices for buying a currency and selling a currency. The difference amount becomes their profit margin. The spread usually changes from time to time and varies on the type of execution model.

ECN: 0.7 | STP: 1.6

Fees

Apart from spreads, one needs to pay a charge for every execution a trader makes. It is essentially the commission levied by the broker on each trade. As a matter of fact, there is no fee on STP accounts. But, on ECN accounts, there is a fee of few pips.

Slippage

Going by the definition, slippage is the difference between the price executed by the trader and the price he actually received. It could be in favor of the trader or against him. It all depends on the broker’s execution speed and the change in the volatility of the market.

Trading Range in AUD/JPY

A trading range is a tabular representation of the minimum, average, and the maximum pip movement in a currency pair on different timeframes. These values help in determining the profit that can be made or loss one must bear in a given time frame. And this can be found out by simply finding the product between the pip movement and the value per pip ($9.15).

Procedure to assess Pip Ranges

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

AUD/JPY Cost as a Percent of the Trading Range

Cost as a percent of the trading range is an illustration of the cost variation by considering the total cost and the volatility of the market in different timeframes. These values are expressed in a ratio that is converted to percentages. And the magnitude of these percentages helps in determining the cost variation in each trade.

ECN Model Account

Spread = 0.7 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.7 + 1 = 3.7

STP Model Account

Spread = 1.6 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.6 + 0 = 3.6

The Ideal way to trade the AUD/JPY

Though Forex is a 24/7 market, it is not ideal to enter any time in the market. There are certain times when you must enter the market, which can help reduce costs significantly. Let us determine that using the above tables.

Note that the higher the magnitude of the percentage, the higher is the cost of the trade. From the table, it can be ascertained that the values are high in the minimum column, implying that the costs are high when the volatility of the market is low. Similarly, the costs are low when the volatility is high. However, it is not ideal to trade during these times. To ensure optimum volatility and affordable cost, one must trade during those times when the volatility is around the average range.

Furthermore, there is another way through which you can reduce your costs. Trading using limit orders instead of the market orders brings down the total cost significantly, as the slippage becomes zero. The decline in the costs on the trade when slippage is made zero is shown below.

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Understanding The AUD/CAD Forex Currency Pair

Introduction

Introduction

Introduction

AUDCAD is the abbreviation for the currency pair, the Australian dollar, and the Canadian dollar. It is a cross-currency pair. One can expect great volatility and liquidity in the market during the Australian session. AUD is the base currency, and CAD is the quote currency.

Understanding AUD/CAD

The value of AUDCAD is the number of Canadian dollars required to buy one Australian dollar. It is quoted as 1 AUD per X CAD. For example, if the value of this pair is 0.9013, then 0.9013 CAD is needed to purchase one AUD.

AUD/CAD Specification

Spread

Spread in trading is the difference between the bid price and the ask price set by the broker. This pip difference is how brokers generate revenue. The spread always varies from broker to broker and the type of account model.

ECN: 1 | STP: 1.9

Fees

Apart from spreads, brokers charge a few pips of fee or commission on each trade you take. This exists only ECN accounts, as a fee on STP accounts is nil.

Slippage

Due to the delay in the broker’s execution speed and volatility of the market, a trader doesn’t get the exact price he intended. This difference in prices is referred to as slippage. It typically varies from 0.5 pips to 5 pips.

Trading Range in AUD/CAD

The trading range is the representation of the minimum, average, and maximum volatility in the market in a given timeframe. This proves to be useful in determining the profit/loss that can be made in a specific amount of time. One can determine this simply by finding the product of the pip movement on the required timeframe and the pip value (mentioned in the specification table).

Procedure to assess Pip Ranges

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

AUD/CAD Cost as a Percent of the Trading Range

The cost of trade is an essential point of consideration in trading. Cost is that factor that is not fixed and varies on different variables. For example, when the volatility changes, the costs change. The same is the case with timeframes as well. Below is a table that illustrates the variation in the costs on a trade for different timeframes and volatilities.

ECN Model Account

Spread = 1 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 1 + 1 = 4

STP Model Account

Spread = 1.9 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.9 + 0 = 3.9

The Ideal way to trade the AUD/CAD

Comprehending the above tables is simple. The higher the magnitude of the costs, the higher is the total cost that has to be paid on a trade and vice versa. In the table, the percentages are on the higher side in the min column and lower in the max column. Hence, it can be concluded that the costs are higher when the volatility is low and vice versa. However, it isn’t ideal to trade in these situations. It is rather preferred to enter the market when the volatility is around the average values because the costs are affordable, and the volatility is as needed.

Moreover, it is recommended to design strategies such that limit orders are put to use. This shall completely eliminate the slippage on the trade. And with the elimination of slippage, the total cost would significantly reduce as well.