I've gone over his numbers, and I think he's drunk on maple syrup again (inside joke).
fxterrapin,
Please tell me my last PMs were wrong, otherwise you might have me calling into question the whole mantra of 'German engineering'.
And no those days are anyway long gone (if they ever existed).
- #24
- Oct 23, 2008 2:55am Oct 23, 2008 2:55am
- | Joined Jun 2008 | Status: Don't do more, do less better! | 259 Posts
This is a good way to describe it: The P/L basically shows the gain I made by not holding EUR (past the entry price). It's not a P/L that you can book by closing out the trade and buying back the currency that you sold (EUR in this case).
So the 'trade' was really a conversion of your 170k cash Euro balance into USD at 1.46839 which gave you $249,626.30, and then you brought back your original 170k Eur at 1.28839 which cost you $219,026.30, leaving $30,600 over. Assuming you didn't convert that $30.6k gain into Eur where is it now, is it in your USD account? I guess depending on where you think Eur/Usd is headed, and what currency you'll need for withdrawals, will decide whether you hold Eur or USD. There must be a way to permanently convert your account base currency if you wanted to.
How are your Euro and USD account balances segregated, are they two different accounts? Did you have a choice of which account you made the transaction on ie making it on the Eur cash balance account was a conversion, whereas the USD account would have been a leveraged trade (Eur being the trade base currency).
.....what was the original question again, it's seems like a long time ago
.....we haven't even delved into the issues of managed accounts or currency cross margins (those are entirely different stories altogether....
PIP value is the sole number where all others follow.
It is the absolute ruler.
ie, If you made 100 pips, it is 100 pips regardless of currency pair you traded.
However, when converting to actual currency (ie, USD, EUR, JPY) in which your account is funded, the rule of thumb is:
Pip value * Value of the Currency on the Right size of the currency pair.
Example:
10 Pips profit on EURUSD = 10 pips * USD1.00 * number of Mini Lots
10 pips profit on USDJPY = 10 pips * JPY100.00 * number of Mini lots; if you want to convert this to USD, then multiple it by the inverse of USDJPY.
Why did we use USD1.00 on the 1st example while we use JPY100 on the second?
Because, each pip value on xxxUSD pairs is 1/10000 while each pip in xxxJPY is in 1/100 or 100 times move than xxxUSDs. This is why we multiple it with JPY100 (and not by JPY1.00).
Sold EURUSD @ 1.4680 and close it @ 1.2880 is a solid 1800 pips profit. This 1800 pips profit WILL NOT change regardless of how many lots in this position or how many days it was opened.
Some brokers charges swap by changing/Adjusting your open price (such as Saxo) but the bottom line is (to avoid confusion), just count the $$$ PnL.
BTW fxterrapin. I assume that your account was opened in EUR as it was initially funded in EUR and this was traded with 1:1 Leverage???
LOL! You made money shorting EUR, but lost just as much because your account is in EUR!
1 Step Forward, 1 Step Backward
If this is indeed that case, you should have physically sold your EUR and bought USD and deposited just the same onto a bank. No Negative Swap no commission no dumb broker hassle.
That's the entire point. I DID convert it physically. That was the trade.
- #28
- Oct 23, 2008 6:55am Oct 23, 2008 6:55am
- Joined Jul 2006 | Status: Trader | 2,924 Posts
That's the entire point. I DID convert it physically. That was the trade.
1:1 leverage suck!