Malaysian Ringgit – Forex Academy

Introduction

The CAD/MYR is an exotic Forex currency pair where CAD is the Canadian Dollar, and the MYR is the Malaysian Ringgit. In this pair, CAD is the base currency, while the MYR is the quote currency. The price associated with this pair represents the amount of MYR that can be traded for 1 CAD. For example, if the price of the CAD/MYR is 3.1163, it means that 1 CAD can purchase 3.1163 MYR.

CAD/MYR Specification

Spread

When trading a currency pair, the ‘bid’ price and the ‘ask’ price are different. This difference constitutes the revenues that brokers earn, and is called the spread. Below is the spread charges for ECN and STP brokers for CAD/MYR pair.

ECN: 4 pips | STP: 9 pips

Fees

Fees represent the charges that brokers impose on forex traders when opening a position. These charges vary on the ECN account, depending on your forex broker. STP accounts usually do not charge fees for trading.

Slippage

Sometimes we intend to complete a trade with a prevailing price, but instead, the trade is executed at a different price. The difference between the two prices is slippage, and it is a result of market volatility and your broker’s speed of execution.

Trading Range in the CAD/MYR Pair

The trading range shows the volatility of a currency pair across different timeframes from minimum to the maximum expected volatility. The knowledge of market volatility can help a trader estimate possible gains or losses for different timeframes. Let’s say that the maximum volatility for the CAD/MYR pair at the 1-hour timeframe is 20 pips. A forex trader trading one standard lot of this pair can expect to gain or lose $64.2

Below is the trading range for the CAD/MYR pair.

The Procedure to assess Pip Ranges

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

CAD/MYR Cost as a Percentage of the Trading Range

When the cost of trading is expressed as a percentage of the trading range, it can help a forex trader implement proper risk management measures. Below are cost analyses of the CAD/MYR pair for both the ECN and the STP accounts.

ECN Model Account

Spread = 4 | Slippage = 2 | Trading fee = 1

Total cost = 7

STP Model Account

Spread = 9 | Slippage = 2 | Trading fee = 0

Total cost = 11

The Ideal Timeframe to Trade CAD/MYR

In both the ECN and STP accounts, the 1-hour timeframe during minimum volatility of 0.1 pips has the highest trading cost. Generally, the 1H, 2H, 4H, and daily timeframes have higher trading costs compared to the weekly and the monthly timeframes. Therefore, longer-term traders of the CAD/MYR pair enjoy lesser trading costs.

However, the intraday traders can reduce their trading costs by initiating trades when the volatility for the 1H, 2H, 4H, and daily timeframes is above average. They can further lower these costs by using the forex limit orders, which eliminates the slippage costs. Here’s an example with the ECN account.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 4 + 1 = 5

You can notice that the overall trading costs have reduced when the limit orders are used. For example, the highest trading cost has been lowered from 118.64% to 84.75% of the trading range. Cheers.

Introduction

CHF/MYR is the abbreviation for the Swiss Franc against the Malaysian Ringgit, and it is considered an exotic currency pair. In this case, the CHF is the base currency, and the MYR is the quote currency. The franc is the official currency of Switzerland and Liechtenstein, while MYR is the official currency of Malaysia.

Understanding CHF/MYR

The market value of CHF/MYR defines MYR’s value that is obliged to buy one franc. It is priced as 1 CHF per X MYR. If the price of the pair is 4.5465 in the market, then these many Malaysian ringgit units are required to buy one CHF.

Spread

The distinction in price between the bid and ask price is determined as Spread. Bid and ask prices are set by the broker. This pip difference is where most of the brokers generate their revenue. Below are the Spread values of CHF/MYR Forex pair in both ECN & STP accounts.

ECN: 44 pips | STP: 49 pips

Fees

The fee is the price you spend on each spot you open with the broker. There is no fee imposed on STP account models, but a few extra pips are charged on ECN accounts.

Slippage

The difference between the price at which, trader implements the trade, and the price he receives from the broker is termed Slippage. This fluctuates based on the broker’s execution speed and the market’s volatility.

Trading Range in CHF/MYR

The total money you will gain or lose in a particular timeframe can be measured utilizing the trading range table. This represents the maximum, average, and minimum pip movement in a currency pair.

Procedure to assess Pip Ranges

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

CHF/MYR Cost as a Percent of the Trading Range

The cost of trade alters based on the volatility of the market. This is for the reason that the total cost involves Slippage and spreads apart from the trading fee. Below is the interpretation of the cost variant in terms of percentages. The understanding of it is reviewed in the following sections.

ECN Model Account

Spread = 44 | Slippage = 5 |Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 44 +8 = 57

STP Model Account

Spread = 49 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 49 + 0 = 54

Trading the CHF/MYR

The CHF/MYR is not an extremely volatile currency pair. For instance, the average pip movement on the 1H timeframe is only 84 pips. Note that the elevated the volatility, the smaller is the cost of the trade. However, this cannot be considered a benefit as it is risky to trade extremely volatile markets.

Also, the higher or lesser the percentages, the higher or lower are the costs on the trade. We can conclude that the costs are elevated for low volatile markets and high for extremely volatile markets.

To reduce your risk, it is proposed to trade when the volatility is near the average standards. In this case, the volatility is low, and the costs are slightly high related to the average and the maximum values. But, if your primary concern is on lowering costs, you may trade when the market volatility is near the maximum values.