Tag: SEK

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Forex Assets

Trading The CAD/SEK Forex Exotic Currency Pair & Analyzing The Costs Involved

Introduction

Introduction

Introduction

CAD/SEK is a Forex exotic currency pair, where CAD is the primary currency of Canada, and SEK (Swedish Krona) is the currency of Sweden. In this exotic currency pair, CAD is considered the base currency, and SEK as the quote currency. This pair’s price determines the value of SEK, which is equivalent to one CAD. We can quote it as 1 CAD per X numbers of SEK. For example, if the CADSEK pair’s value is at 6.5877, we would need almost 6.5877 SEK to buy one CAD.

CAD/SEK Specification

Spread

In all the financial markets, the spread represents the difference between the Bid and Ask prices. It is typically a charge that is deducted by the Forex broker. These spread values vary on the type of execution model used for trade execution.

The spread of the CAD/SEK pair on ECN is 39 pips, and on the STP model account is 44 pips.

Fees

The trading fees that forex brokers are similar to the stock market. It is deducted from the traders’ accounts as soon as they open a new position. There is no fee charged on STP accounts, but a few pips are charged on ECN accounts.

Slippage

Slippage occurs when a trader opens a trade at a price, but it opens at another price by expanding the spread. The main reason for the slippage to occur is the market volatility and the broker’s execution speed.

Trading Range in CAD/SEK

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/SEK Cost as a Percent of the Trading Range

The below tables represent the percentage values of trading costs involved while trading this particular Forex asset in various time frames. Please note that these values must be used for directional purposes only. So, for instance, if the percentage of costs involved is high in the one-hour time frame, it implies that this pair is expensive to trade in that particular time frame.

ECN Model Account 

Spread = 39 | Slippage = 5 | Trading fee = 8

Total cost = Spread + Slippage + Trading Fee

= 39 + 5 + 8 = 52

STP Model Account

Spread = 44 | Slippage = 5 | Trading fee = 0

Total cost = Spread + Slippage + Trading Fee

= 39 + 5 + 0 = 49

The Ideal way to trade the CADSEK

The CAD/SEK is an exotic cross currency pair with sufficient liquidity. As a result, traders may find it easy to trade in this pair. If we look at the table, we would see that the percentage values did not move above 65%, representing a lower trading fee even in the lower timeframe. Therefore, trading in this currency pair is suitable for intraday, swing, and even scalping. However, the best decision is to trade when the cost of trading is at the average value.

There is another way to reduce the cost while trading this pair, and it is to place a pending order. We can either place a limit or stop order instead of the market order. In that case, the slippage won’t be considered while calculating the total costs. Therefore, in our example, the overall cost will be reduced by five pips, as shown below.

STP Model Account (Using Limit Orders)

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

Total cost = Spread + Slippage + Trading Fee

= 44 + 0 + 0 = 44

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Forex Assets

Asset Analysis – Trading The NZD/SEK Exotic Cross Currency Pair

Introduction NZD/SEK is the acronym for the currency pair New Zealand dollar versus the Swedish Krona. It is marked under the exotic cross-currency pair category. In this pair, NZD will be the base currency, and SEK will be the quote currency. In this article, we shall understand everything about trading this currency pair. Understanding NZD/SEK […]

Introduction NZD/SEK is the acronym for the currency pair New Zealand dollar versus the Swedish Krona. It is marked under the exotic cross-currency pair category. In this pair, NZD will be the base currency, and SEK will be the quote currency. In this article, we shall understand everything about trading this currency pair. Understanding NZD/SEK […]

Introduction

NZD/SEK is the acronym for the currency pair New Zealand dollar versus the Swedish Krona. It is marked under the exotic cross-currency pair category. In this pair, NZD will be the base currency, and SEK will be the quote currency. In this article, we shall understand everything about trading this currency pair.

Understanding NZD/SEK

The price of this pair in the foreign exchange market determines the value of SEK comparable to one NZD. It is quoted as 1 NZD per X SEK. So, if the value of this pair is 5.8296, these many Swedish Kronor (SEK) are required to purchase one NZD.

Spread

Trading the Forex market usually does not involve spending a lot of fees like the Stock market. Here, Forex brokers make profits through spreads. It is nothing but the difference between Bid – Ask prices of an asset. Some broker has the cost inherent into the buy and sell prices of the currency pair; instead of charging a separate fee. Below are the spread values of ECN and STP brokers for the NZD/SEK pair.

ECN: 48 pips | STP: 53 pips

Fees

A Fee is the charges we pay to the stockbroker for executing a particular trade. The fee fluctuates from the type of broker we choose. For example, the fee on the STP accounts is zero, but we can expect a few additional pips on ECN accounts.

Slippage

Slippage is the contrast between the price expected by the trader for execution and the price at which the agent executed the price. There is this variation due to the high market volatility and more passive execution speed.

Trading Range in NZD/SEK

The trading range is used at this point; to measure the volatility of the NZD/SEK pair. The amount of money we will gain or lose in an allotted timeframe can be evaluated using the trading range table. The minimum, average, and maximum pip movement of the currency pair is exemplified in the trading range. 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 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/SEK Cost as a Percent of the Trading Range

The rate of trade varies on the stockbroker and fluctuates according to the volatility of the market. This is because the trading cost includes fees, slippage, and the spread. The rate of variation in terms of percentage is given below.

ECN Model Account

Spread = 48 | Slippage = 5 |Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 48 + 8 = 61

STP Model Account

Spread = 53 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 53 + 0 = 58

The Ideal way to trade the NZD/SEK

The NZD/SEK is termed as an exotic-cross currency pair and has a low volatile market. Looking at the pip range table, the average pip movement on the 1H timeframe is 115 pips, which implies high volatility. As we know, the higher the volatility, the smaller will be the cost to implement the trade. Nonetheless, this is not a benefit to trading in a volatile market; it involves higher risk.

For instance, in the 1M time frame, the Maximum pip range value is 1938, and the minimum is 503. When we evaluate the trading fees for both the pip movements, we notice that for 503 pip movement fees is 12.13%, and for the 1938 pip movement, fess is only 3.15%. Therefore, from the above instance, we can determine that trading the NZD/SEK currency pair will be on the expensive side.

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Forex Assets

Trading Costs Involved While Trading The ‘CHF/SEK’ Forex Exotic Pair

Introduction

Introduction

Introduction

The acronym of CHF/SEK is Swiss Franc, paired with the Swedish Krona. In this exotic Forex pair, CHF is the official currency of Switzerland and is also the fifth highly traded currency in the Forex market. In contrast, SEK stands for the Swedish Krona, and it is the official currency of Sweden.

Understanding CHF/SEK

In the Forex market, to ascertain the relative value of one currency, we need an alternate currency to assess. The market value of CHF/SEK helps us to understand the power of SEK versus the CHF. So, if the trade rate for the pair CHF/SEK is 9.8418, it means to buy 1 CHF, we need 9.8418 SEK.

CHF/SEK Specification

Spread

Spread is the variable between the ask-bit price that is set at the exchanges. Below are the spread values of the CHF/SEK currency pair in both ECN & STP accounts. The spread charges for ECN and STP brokers for CHF/SEK are given below.

ECN: 45 | STP: 50

Fees

For every place, a trader enters the broker charges some fee for it. A trader must know that this fee is applicable on ECN accounts only and not on STP accounts.

Slippage

Slippage is the price variation between the trader’s execution and at which the broker implemented the price. The variance is due to high market volatility and slow execution speed.

Trading Range in CHF/SEK

A trading range is the interpretation of the volatility in CHF/SEK in numerous timeframes. The values are attained from the Average True Range indicator. One can use the table as a risk management tool to distinguish the profit/loss that a trader is possessed.

Below is a table explaining the minimum, average, and max volatility (pip movement) on a variety of 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/SEK Cost as a Percent of the Trading Range

The entire cost of the trade varies based on the volatility of the market. So, we must find out the instances when the costs are less to place ourselves in the market. Below is a table explaining variation in the costs based on the change in the market volatility.

Note: The percentage costs represent the comparative scale of costs and not the fixed costs on the trade.

ECN Model Account

Spread = 45 | Slippage = 5 | Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 45 + 8= 58

STP Model Account

Spread = 50 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 50 + 0 = 55

The Ideal way to trade the CHF/SEK

The two components a trader should consider while trading any security in the markets are – Volatility & Cost. With the help of the above tables, let us evaluate these two factors to trade the CHF/SEK ideally.

We can see that the pip difference is substantially high among the minimum volatility and the average volatility in every timeframe. For a day trader, the objective is to make revenue from the pip movement of the market. But, if there is barely any pip movement in the price, it becomes difficult to make profits out of the market. Therefore, it is perfect to trade when the volatility is at the average value.

The cost increases as the volatility decline, and they are inversely proportional to each other. In other words, highly volatile markets have the lowest costs. However, it is relatively risky to trade markets with higher volatility though the costs are low. Therefore, to maintain stability among the cost and volatility, traders may discover instances when the volatility is close to the average values or a little above it.

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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

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.