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brownsfan019

Profit Vs. "no Commission" of Fx

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Question for you fx traders - at what point does a trade become profitable?

 

Example - I am demo'ing the FXDD platform and I was in a trade today where price was at my entry level (or supposedly) but it was showing a negative profit...

 

Shorted USDJPY @ 106.43 and when price was resting at 106.43, I was down $20 or $30 on the platform. The $ amount is irrelevant to me, but I'm scratching my head going - if I short at 106.43 and price is at 106.43, how am I down?

 

I am a futures trader by background, so this FX "no commission" stuff is a bit different to me.

 

Thanks!

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Guest forsearch

A good site and resource that might help answer your question definitively is Kreslik.com, IMHO.

 

I'm sure some of the Forex regular at TL will stop by to let you know, in any event.

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Not a forex regular, but you are most likely looking a the bid/ask difference. Most forex platforms don't do a good job showing this. The "no comission" thing is a joke, as you are paying for it in the spread (which varies according to the broker).

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Exactly right. And tbh it is appropriate. Your P+L should reflect the price at which you could realise your gains / losses right now. So for a platform like most retail ones, where you always have to cross the spread to get in or out, the appropriate rate to mark a short position against is the current offer (and vice versa).

 

Doesn't mean all platforms do this (I have a sneaky feeling CMC SB doesn't for example) but it represents a worst case, and therefoer surely isn't a bad thing to have.

 

PM me if you need any further help. Will do my best.

 

GJ

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Exactly right. And tbh it is appropriate. Your P+L should reflect the price at which you could realise your gains / losses right now. So for a platform like most retail ones, where you always have to cross the spread to get in or out, the appropriate rate to mark a short position against is the current offer (and vice versa).

 

Doesn't mean all platforms do this (I have a sneaky feeling CMC SB doesn't for example) but it represents a worst case, and therefoer surely isn't a bad thing to have.

 

PM me if you need any further help. Will do my best.

 

GJ

 

Ok, that makes perfect sense now.

 

In my example, I was short at 106.43 and to exit, I may have to exit at 106.45 due to the 'no commission' FX market.

 

This is good, I am learning more about FX every day.

 

I have a pretty nice looking way to trade FX (all in hindsight) but wondering about the spreads and such eating into that...

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Bf-

It is something that does take some getting used to. Every trade you open, you are immediately in the hole, but once you get past B/E, you have already paid your broker.. I am looking to switch to futures because most of them charge a commission when you open and when you close- but at say $7.50 per "end" that is $15

 

You open a 3 pip pair like the GBP/USD on a 2.00 lot- you "pay the broker" $30.. futures is darn near a no brainer as far as costs are concerned- especially if you are a scalper. Longer-term, ehh it is something you get used to and tend to forget about it.

 

I see it as my admission fee to the diamond mine, I get to pull out all I can and they only charge me $30 bucks for access to the mine :o

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Bf-I am looking to switch to futures because most of them charge a commission when you open and when you close- but at say $7.50 per "end" that is $15

 

Sledge,

 

If your futures broker is charging you $7.50 per side ($15 R/T) per contract for electronically trading currency futures at the CME, you ought to seriously be seeking another broker.

 

You should be able to get much, much better rates these days....

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Sledge,

 

If your futures broker is charging you $7.50 per side ($15 R/T) per contract for electronically trading currency futures at the CME, you ought to seriously be seeking another broker.

 

You should be able to get much, much better rates these days....

 

Sent you a PM

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