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| Funding account with exotics vs USD or AUD https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=3577 |
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| Author: | SpiderX [ Wed Apr 23, 2014 4:58 pm ] |
| Post subject: | Funding account with exotics vs USD or AUD |
Hi, Got a probably noob question here....is there a difference when the trading account's base currency is in an exotic like HKD/SGD vs a more mainstream currency like USD/AUD ? Is is better to have base currency in AUD/USD so we get better rates during profit conversion ? Cheers |
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| Author: | Jeuro [ Wed Apr 23, 2014 8:09 pm ] |
| Post subject: | Funding account with exotics vs USD or AUD |
Whatever is your base currency, the only difference is the conversion at the time you close a trade. Example...if you long EURUSD you will win or lose USD ...(would win or lose EUR if you short it). That profit or losse is converted at the present rate of your base currency. Say you win 500usd ... and your account is in AUD , they would convert 500usd at the AUDUSD price at the tick you closed the trade. If you base is HKD , the 500usd is converted at the USDHKD rate. No advantage whatsoever to have a trading account in a different currency other then our own currency. Only disadvantages... the exchange rate of hard money is very expensive. If you feel an exotic is appreciating for the long and your own currency is USD.. deposit the USD and buy the equivalent of the 5000usd in the exotic and keep open. Same as if you opened the account in the exotic but with less cost. J. |
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