66.30 % of retail investors lose their capital when trading CFDs with this provider.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66.30 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Academy How to trade EURPLN

EURPLN cross – Definition and Characteristics

The EURPLN cross is a minor currency cross. Traded volume here is much smaller than in the major pairs, and the EURPLN cross is less liquid – it is evident, for example, during the Asian session, when the price barely moves. 

Visegrad Four club

The Czech Crown, Hungarian Forint, and the Polish Zloty are the currencies of the so-called "Visegrad Four," with the fourth country in this club being the Slovak Republic. However, Slovakia has already adopted the Euro. 
Similarly to the Czech Republic, Poland is not rushing to adopt the Euro, and we might not see this happen in the near future. 

The quotation of the cross says to traders how many Polish Zlotys are needed to buy one Euro.

Thus, the value of the EURPLN cross is quoted as 1 Euro per X Polish Zlotys. Meaning, if the cross is trading at 4.50, it requires 4.5 Polish Zlotys to buy one Euro. If the EURPLN cross rises to 5.00, it means that the Euro has strengthened (the Zloty has weakened), and it now takes 5 PLN to buy one Euro. Alternatively, if the EURPLN cross drops to 4.20, it means that the Euro has weakened (and the PLN has strengthened), and it now takes 4.20 Zlotys to buy one Euro.

 

What drives the EURPLN cross?

Along with the Czech crown and the Hungarian forint, the Polish Zloty is considered a risky currency on the European continent. It comes from the fact that Visegrad countries are dependent on other more prosperous countries in the EU (such as Germany, France, etc.). If the EU slides into a recession, the Visegrad countries usually experience a more profound economic contraction. Alternatively, if the EU experiences growth in economic activity, the V4 countries tend to outperform.

To summarize, the V4 currencies tend to strengthen and outperform the Euro during the good times, while the bad times usually lead to a sell-off in these currencies.

Moreover, the divergence between monetary policies usually plays a role in currency movements as well. Poland used to have the benchmark interest rate at 1.5%, which was way higher than zero-to-negative rates in the eurozone. However, after the coronavirus crisis, Poland slashed its interest rate to 0.5%, making the Polish Zloty less attractive to investors.
The EURPLN cross rose from 4.30 to 4.60 in a matter of days, which was a 7% depreciation of the Polish Zloty.

Performance

As you can see from the weekly chart of the EURPLN cross, it has been stable for many years, moving in the 4.00 – 4.30 zone. However, the coronavirus sell-off of the PLN brought the cross to new cyclical highs above 4.50. It looks like there are not many opportunities here for the long-term investors as the price had been moving sideways, but short-term traders can benefit from higher volatility on the EURPLN cross.


Source: Purple Trading MetaTrader 4

EURPLN cross – quotes and trading

If you are interested in trading the EURPLN cross, open our Metatrader 4 platform and find the EURPLN cross in the symbols. When you click on the new order, the following window will appear.
 


Source: Purple Trading Metatrader 4
 

As you can see, the spread between the Ask and the Bid price is ten pips, but the spread can fluctuate slightly, mainly during volatile times of the day. 
 

Lot value calculation

The minimum amount to trade is 0.01 lot, while one lot represents 100,000 EUR. So, if you are trading 0.01 lot (or a micro lot), you will be trading 1,000 EUR. The 0.1 lot is also called a mini lot and represents 10,000 EUR. If you want to buy or sell half a lot, you will be trading 50,000 EUR. Two lots are 200,000 EUR and so on.
Besides, you can open a market execution trade, which means that it will be done at the current market price, or you may use pending orders – limit and stop orders. Finally, it is possible to use the stop-loss and take-profit orders when opening the trade, or you can add them later when the deal is live.

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FAQ

Long
Show answer
A long position (long speculation) is a trade that a trader enters when he expects the market to rise. Thus, the trader will buy the asset in question (BUY). The position will appreciate in value when the price of the instrument rises.
Lot
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The basic unit of traded volume. For currency pairs, it is 100,000 units of the base currency. Lot size varies between individual CFD-type instruments as it is based on the number of contracts set for each one.

 
Micro-lot
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A micro-lot is a trading unit derived from the standard trading unit, which in the Forex world is the lot. While 1 lot represents a transaction of 100,000 units of the currency mentioned first in a currency pair, the value of 1 micro lot is 1,000 units.

If you are interested in the relationship between lots, micro-lots, leverage, and margin, we recommend reading the article about micro-lots we wrote on the subject.

A micro lot is 0.01 lot.
Mini lot
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A mini lot is a volume of 0.1 lot.
Quote currency (counter currency)
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It is the second currency in the currency pair. For example, in the EURJPY pair, the quote currency is JPY.
Short
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Short speculation is a trade where the trader anticipates a market decline. So the trader will sell the asset (SELL).
Swap
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A fee charged for holding a trading position overnight. It is expressed in points or percents and it is directly proportional to the volume of the trading position held. Please note the Swap for Forex pairs and precious metals is being charged 3x on Wednesday, which includes also the weekend swaps. (Swap is charged at Wednesday - Thursday midnight) For other symbols is being charged 3x on Friday. (Swap is charged at Friday - Saturday midnight)
66.30 % of retail investors lose their capital when trading CFDs with this provider.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66.30 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66.30 % of retail investors lose their capital when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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CFDs with underlying asset a virtual currency pair are complex, extremely risky, and usually highly speculative and entail a high risk of losing all the invested capital and therefore are not appropriate for all investors. The values of virtual currencies values are subject to extreme price volatility and therefore may result in significant loss over a short period of time. Clients should not engage in trading in CFDs with underlying asset a virtual currency pair unless they have the necessary knowledge in this specific product; or if they can bear the loss of the entire invested amount. For more details please see the Risk Warnings and Disclosures.


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