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Hi all, I need some basic advice. I'm opening a Desktop platform Forex account with MB Trading and I can choose to have it as USD or GBP dominated account. I'm from the UK so the GBP account seems sensible. Apart from your funds being held in GBP is there any-other advantage I should be aware of?
Also when I do trade the Eur-Usd using say for example a standard lots = $100,000 is this $10 per pip just taken from my GBP based account and converted at the current exchange rate?
So to summarize, I'm from the UK but should I have a GBP or USD dominated account for Forex trading?
Thanks in advance for any advice......
Can you help answer these questions from other members on NexusFi?
Unless you want to speculate against the pound, you should have your account in GBP.
If you trade EURUSD, your funds in GBP can be used to cover your margin requirements. Your profits or losses will be in USD.
So your funding balance would be in GBP, and the balance of your USD denominated profits or losses in USD. From time to time you may elect to convert your $ balance back to GBP. I do not know how this is handled by MB Trading.
Platform: Ninjatrader, Motivewave, tradestation and metatrader
Trading: eur/usd, Oil, ES
Posts: 16 since Sep 2011
Thanks Given: 3
Thanks Received: 12
IMO if you have $ account and if you are depositing and withdrawing from your account regularly, you will lose alot on exchange rates which is more or less same as if you go to a bank and exchange your £ to $. the spread is huge.
AFAIK, If you open a GBP account with MB Trading, everything is GBP. You deposit in GBP(only via wire transfer), your PNL is in GBP and you withdraw in GBP(only via wire transfer)
As yusaf mentioned conversion spreads are crazy at banks(in addition to wire transfer fees), but you can use XE.com to do conversions at a much more favorable rate.
I have considered getting a GBP account because of the thought that if 1 pip = 1USD, then it would be better if 1 pip could equal 1GBP. Is this a valid way of looking at it? Would this actually increase PNL on the same position size, or is the relative value of the currency just another form of leverage that gives you @$1.6USD per pip vs 1USD?
