What's My Broker Trying to Do to Me ! ?

[illumintai 10]

Sorry about the dramatic title.

 

My broker is saying my transaction charge on FX trading will be 0.005 bps on the % of notional value which apparantly translates to £5 fee on 100,000 volume. I don't really understand this.

 

I'm trying to wrap my head around the "proper" way FX is traded and move away from thinking in terms of trading £ X per pip which then by knowing my stop distance I can easily calculate my trade size as a % of my account.

 

I have a GBP account intending to trade EURUSD. Can you help me calculate how to.. basically position size ? I believe its a mini lot FX account with 1% margin.

 

Thank you.

[Niko 10]

Trade 6E if you like currencies that much and save yourself a lot of trouble. Besides, your "broker" is most probably a dealer.

[4EverMaAT 10]

That's about $7.50-8 USD per round turn trade per 100,000 units of currency traded (1.00 standard lot size). Not terrible, but you could request a discount as your volume increases.

 

A broker dealer isn't necessarily a bad thing; as long as they are getting you filled in a Straight-Through Processing (STP) fashion, you should be fine.

 

What is the name of your broker btw?