Introduction to EUR/PLN
The Zloty is Poland’s official currency and legal tender. Its sign is ZŁ and code, PLN. This is subdivided into 100 grosz (gr). The commonly accepted English version of the currency is the Polish Zloty which literally translates to ‘golden.’ The Polish zloty’s name comes from “zloto,” the Polish word for gold, and traces its existence back to the middle ages. It is the most traded currency in Central Europe and ranks 22nd on the foreign exchange market.
Historical Overview of the EUR/PLN
What are the characteristics of the EURPLN pair?
This pair is a major/minor currency pair, its characteristics are similar to that of majors/minors.
- The spread is around 30 pips, which are lower compared to other exotic-cross currencies involving EUR as the base currency.
- The Euro and the Polish zloty are quite volatile. Experienced traders will be able to make good profits from an unstable rate.
- The volatility of this pair is pretty decent. It is neither too high nor too low.
VOLATILITY of EUR/PLN
Tips for Trading EUR / PLN
- First, the trader should know that the spread is around 30 pips. They are quite lower when compared to other exotic-cross currencies that involve EUR as the base currency. Second, the volatility of this pair is neither too high nor too low.
- If the values in the min column are significant. It is not wise to trade this pair in low volatility but for one to have adequate volatility with low-costs. One could trade when the volatility is at the average values.
- Putting market orders through ‘limit’ and ‘stop’ will decrease the costs. Conversely, if you trade cross rates, bear in mind that brokers regularly set a higher spread on such kinds of pairs in comparison to the majors. Hence, before you begin trading with the cross rates, try to get familiar with the conditions given by the broker. Slippage on the trade will be annulled, and it will, on the same hand, reduce the total costs.
Correlations of the EUR / PLN pair
How can one trade EUR/PLN?
- First, identify the profitable seasonal window. To know when to enter the market, is recommended.
- After identifying the profitable seasonal window, sell EUR/PLN on the closing price of the starting date on June 28 (22:59 CET).
- Identify the maximum loss within the seasonal period. Then, have a look at the daily chart and the ATR(14) indicator;
- If the maximum loss is above the ATR(14) reading, round it up to the next round number and use it as the worst-case-stop. b. If the maximum loss is below the ATR(14) reading, use the ATR(14) as your stop-width (rounded up to the next round number).
- Look at the average gain of the seasonal pattern, and place the take profit at this distance from your entry point.
- If the trade is not stopped out or it does not reach its take profit within the seasonal period, end the trade market on the closing price on July 04.
- The growth retardation in the economy of Germany expected led to the fact that the zloty continues to weaken against the background of the Euro-. But the trader needs to understand that this volatility is entirely predictable.
Spreads of the EUR / PLN pair
What is the most important economic news about EURPLN?
What Factors affect the EURPLN Pair?
A bearish seasonal pattern comes into play which developed over the last 17 years during the time span between June 28 and July 4.
The Eurozone has a 0% interest rate, and Poland has a 0.5% rate. Going long EURPLN will cost a small amount of swap each night, while going short will pay us a small amount. This will vary by broker.