Broker currency? EUR or USD?

[atletrader]

Hello everyone,

I am going to close my FXSolutions, Alpari and FXCM accounts and move my funds to a better broker. Consolidation...

I always have found it hard, not using EUR in my country to decide which currency my account uses. Does it matter what I use between these two, or is maybe USD a safer choice?

[raa]

Atlet, why do you want to lose on converting physical currency from one to another, if you have a power of Forex in your hands? You could open an account in a currency you have already, and if you want to protect from risk (such as euro falling miserably), just open a corresponding position - no tp, no sl, just hedge your balance (sell euro in this case, position size = account size 1:1). The only thing make sure your broker offer you a good leverage so you don't have any significant portion of your account locked up in a permanent margin, but even with 50:1 it shouldn't be a big deal anyway.

PS if your broker is in EU extra advantage to have euro balance is cheap SEPA euro wire transfers.

[Thomas]

Atlet, why do you want to lose on converting physical currency from one to another, if you have a power of Forex in your hands? You could open an account in a currency you have already, and if you want to protect from risk (such as euro falling miserably), just open a corresponding position - no tp, no sl, just hedge your balance (sell euro in this case, position size = account size 1:1). The only thing make sure your broker offer you a good leverage so you don't have any significant portion of your account locked up in a permanent margin, but even with 50:1 it shouldn't be a big deal anyway.

PS if your broker is in EU extra advantage to have euro balance is cheap SEPA euro wire transfers.

Got an additional question about EUR accounts... and maybe it will qualifie to be the most stupid question today Will 1 pip on EUR/USD on an EUR account be worth 1 EUR or 1 USD? (Of cource it depends on how many lots is traded but I think You know what I mean)

[capsmart]

Ahh Thomas,
There are no stupid questions. This is what I found from a forum post when I googled "pip value"


The following should resolve all uncertainties:

First of all you must understand currency quoting conventions and the differrence between the base currency and the terms currency.

In the spot forex market (but not localized futures markets) the quoting
conventions are:

Base / terms:
EUR/USD
GBP/USD
USD/CHF
USD/JPY
AUD/USD

The following rules:

EUR always base
GBP always base except EURGBP
Old colonial like AUD / NZD Always base except EUR / GBP
USD always base except UER / GBP / Old colonials
CHFJPY

Pip values:

To express the value in the terms currency multiply 1 pip with the lot value:

EURUSD pip = 0.0001 X 100,000 = $10.00
EURUSD pip = 0.0001 X 10,000 = $1.00

USDCHF pip = 0.0001 X 100,000 = SFr 10.00
USDCHF pip = 0.0001 X 10,000 = SFr 1.00

To convert to the base currency divide by exchange rate:

Say EURUSD exchange rate = 1.4750 = $10.00 / 1.4750 = EUR 6.78

Say USDCHF exchange rate = 1.1015 = $10.00 / 1.1015 = $9.08

JPY works same principle 2nd decimal.

So to answer your question in eur/usd the pip value will always be 1 dollar and if your account is in euros then you will have to divide your dollar profit with the exchange rate to find the amount of euros that will be added to your account.

[Thomas]

Ahh Thomas,
There are no stupid questions. This is what I found from a forum post when I googled "pip value"


The following should resolve all uncertainties:

First of all you must understand currency quoting conventions and the differrence between the base currency and the terms currency.

In the spot forex market (but not localized futures markets) the quoting
conventions are:

Base / terms:
EUR/USD
GBP/USD
USD/CHF
USD/JPY
AUD/USD

The following rules:

EUR always base
GBP always base except EURGBP
Old colonial like AUD / NZD Always base except EUR / GBP
USD always base except UER / GBP / Old colonials
CHFJPY

Pip values:

To express the value in the terms currency multiply 1 pip with the lot value:

EURUSD pip = 0.0001 X 100,000 = $10.00
EURUSD pip = 0.0001 X 10,000 = $1.00

USDCHF pip = 0.0001 X 100,000 = SFr 10.00
USDCHF pip = 0.0001 X 10,000 = SFr 1.00

To convert to the base currency divide by exchange rate:

Say EURUSD exchange rate = 1.4750 = $10.00 / 1.4750 = EUR 6.78

Say USDCHF exchange rate = 1.1015 = $10.00 / 1.1015 = $9.08

JPY works same principle 2nd decimal.

So to answer your question in eur/usd the pip value will always be 1 dollar and if your account is in euros then you will have to divide your dollar profit with the exchange rate to find the amount of euros that will be added to your account.

Thank You Capsmart... or is it about time to call You Mr. Master Scalper

[capsmart]

No, not master. And I prefer the term day trader.
The problem is discipline (as with everything else).
After 4 weeks of profits I decided to keep my profits and stop losses less tight and today I lost everything I made the two previous days because of this stupid spike. I was expecting it after the news to go south and my stop loss was much higher (and the tp also).
So in order to have a 5th profitable week I will have to go back to plan A. (10 pips at a time)

[atletrader]

Atlet, why do you want to lose on converting physical currency from one to another, if you have a power of Forex in your hands? You could open an account in a currency you have already, and if you want to protect from risk (such as euro falling miserably), just open a corresponding position - no tp, no sl, just hedge your balance (sell euro in this case, position size = account size 1:1). The only thing make sure your broker offer you a good leverage so you don't have any significant portion of your account locked up in a permanent margin, but even with 50:1 it shouldn't be a big deal anyway.

PS if your broker is in EU extra advantage to have euro balance is cheap SEPA euro wire transfers.

OK, I have some Euro in my existing trading accounts I can transfer, but what about converting this back to my currency, NOK? I guess this is what I am really asking. I want to find out which of the major currencies in the long term is best for my NOK crowns. I want one of these majors to be on the strong side to the NOK. But I guess this is too difficult to find out here in a flick...

[raa]

I believe it is not really important will your base currency appreciate or depreciate against NOK, as you always can easily hedge (most brokers offer NOK pair). The question is what is a most convenient currency for you to make deposits (assuming you will add to you account) and withdrawing (when you take some profits to spend).

[atletrader]

I believe it is not really important will your base currency appreciate or depreciate against NOK, as you always can easily hedge (most brokers offer NOK pair). The question is what is a most convenient currency for you to make deposits (assuming you will add to you account) and withdrawing (when you take some profits to spend).

You may be right, but it seems very stressful to always start a hedging trade whenever I trade. Anyways, what do you think of Activtrades? I saw you did some research on it.

[Thomas]

No, not master. And I prefer the term day trader.
The problem is discipline (as with everything else).
After 4 weeks of profits I decided to keep my profits and stop losses less tight and today I lost everything I made the two previous days because of this stupid spike. I was expecting it after the news to go south and my stop loss was much higher (and the tp also).
So in order to have a 5th profitable week I will have to go back to plan A. (10 pips at a time)

I think what You are explaining about Your system is just finetuning and one of the processes of optimizing. 4 profitable weeks in a row is still very good. The important thing in the long run is that You have found a way to trade which suits Your mentality.