Understanding Oanda Orders

Sorry for the (possibly) repeated question, I couldn't find my answer searching.

I'm currently demoing an Oanda account and have one issue that I can't quite clear up.

When placing an order (any kind of order) the platform supplies a list of values at the bottom so you can check your order, two of which I'm not too sure about.

[ul]
[li]Units Available[/li]
[li]1 PIP[/li]
[li]Trade Value[/li]
[li]Margin Used[/li]
[li]Take Profit[/li]
[li]Stop Loss[/li]
[/ul]

I know that the value of 1 PIP is the cash amount of one tick, and that the trade value is the total cost of the trade, what I'm unsure about is their relationship.

As an example I opened a short of 10,000 units. It provided me with a pip value of 1.07 and a trade value of 15,868.70.

I let it go for three pips and lost a total of $4.

Looking at the pip values it all makes perfect sense, it adds up mathematically.

Where does the trade value come into the picture. I really don't see where or how it's being applied.

Thanks.

The Trade Value is the total cost of the trade, in the account's home currency.

Alfonso, is that you?

If someone can check up on this to make sure I've got it right.

It's the total cost of the trade, and when that trade is taken that money is pulled from my account and added to or taken away from depending on the pip movement. When the trade is closed then it's placed back in the account, correct?

Hero Doug,

That is an interesting way of putting it, your logic is sound, but I would like to correct that the money is not pulled from your account. When you make a trade the Trade Value field will show the the total cost of that trade in your account's home currency. That trade is now part of your open positions and you can monitor it in the positions tab of the FXTrade window. Your Unrealized P&L (unrealized because the position is still open) will change according to the changes in price. When you decide to close the position you will "realize" that P&L.

I hope this helped you with this topic.


Xaron,

Hello Xaron, yes its me. Alfonso Esparza. I've had this account for a while, but now going to be more active in FF.

Actually that did clear it up, thanks for the reply.