What’s the currency you hold in your forex broker account?
What’s the currency held in your broker?
This is one very important thing that every forex trader should know.
What’s the currency that you hold in your forex broker account?
Regardless of which country are you living in.
Your currency denominator in your forex account should NOT be in USD.
This may come as a BIG Shocker to you.
And if your denominator is in USD. Change It Now!
-Important Forex Tip – What’s the currency held in your broker?
Here’s why:
My Example: I’m based in Singapore. Around 2-3 years back, the USD to SGD (singapore dollar) is at the rate of 1 : 1.4 (est)
-Therefore $1 USD is equals to $1.4 SGD.
-But today $1 USD is equal to $1.1~ SGD.
So had my forex account denominator be held in USD. I will be making a huge loss!
Just for example. If your capital is $100,000 USD 3 years back, if i convert it back to SGD. It will be $140,000 SGD.
And supposedly, if i never traded the account. Today my capital left will be $110,000 SGD.
Meaning i made a loss on my account even though i did not even took a single trade!
Do you see what i’m driving here.
Even though if i had traded the account, my profits would have been wiped off or massively reduced due to the currency difference.
Which also means that you are practically wasting your time trading forex as none of your profits could be seen.
-Important Forex Tip – What’s the currency held in your broker?
So what now?
-Here’s the fact.
The USD will continue its way down, unless there is a chance of them clearing the trillion of dollars in debt. (chances are really slim)
Til then, the USD will at least not grow back to what it once was.
So if you are living outside of the United States.
You should either put your currency in your own country’s denominator or place it in a country which has a stable economy (eg. Singapore is one of them)
And if you are living in the United States.
You should change your denominator to another country which has a stable economy. (Not EUR – due to its mounting debt)
Some brokers will not allow the change if you are living in the United States but some will.
So if those brokers doesn’t allow you to change your denominator to other currency.
CHANGE THEM!
-Important Forex Tip – What’s the currency held in your broker?
-By changing your denominator to other currency, and if the usd continues falling against the currency you put in.
You will see a growth in your capital without even trading!
So that’s Extra Profits! (or even to cover your losses you made through silly mistakes)
Let me know if this post has helped you.
Do share it and like it! Cheers!
Ezekiel Chew, Asia #1 Forex Mentor from www.asiaforexmentor.com
A complete professional forex trading system that even newbies can apply instantly. Asia Forex Mentor's forex course is now FREE!
Hi Ezekiel Chew,
You have raised a good logical point. But which currency do you recommend?
I have one more question... In case of usd currency, it is very easy to calculate lot size and etc based on usd currency. I only trade pairs that include usd currency. But if I have any other currency and I am not trading that currency. How will it calculate the cost of a currency pair?
For example I have openned account in SGD currency. I bought 1 lot of EUR/USD. Will it charge any commission type thing on it? Coz I dont have EUR or USD in my account.
Originally posted by ChampHi Ezekiel Chew,
You have raised a good logical point. But which currency do you recommend?
I have one more question... In case of usd currency, it is very easy to calculate lot size and etc based on usd currency. I only trade pairs that include usd currency. But if I have any other currency and I am not trading that currency. How will it calculate the cost of a currency pair?
For example I have openned account in SGD currency. I bought 1 lot of EUR/USD. Will it charge any commission type thing on it? Coz I dont have EUR or USD in my account.
Well. Nothing special. It is same as u buy eur/gbp with usd currency. So it doesnt matter.
All that matters is your broker. If your broker offers a currency, you can choose it.
Stick to your rules
usd is not weakening that fast. It is almost ok to have usd. I cannot see decline in future. Euro is expected to fall and usd will get more strength. It is just my opinion. There may be a lot of other factors.
The point told in article is that some currencies r performing much better than USD. An example of SGD is given. So main point is you should compare and choose best available currency.
Usually top brokers do offer many options to choose from. But almost all of them require high investment amount if a trader wants to invest in a currency other than major currencies. That is why a small investor will find it hard to open an account in a currency of his own choice.
Stick to your rules
please remmeber
your trading forex, if you believe that your account might be exposed to weakness on the USD, its is very simple to hedge your account.
for example.. your the trader above... who had an account in USD, but wished his account was in SGD
if you had a 10k exposure, all you had to do was sell the USD/SGD... and your hedged...
remmeber if the broker does it for you, they will charge you for the privledge, as its extra work for them, you can do it yourself pretty easy.
Focus on pips not dollars and you will always make money
really nice comment one should alays remeber to do it him self so as not to pay the fee.
Originally posted by LonelyTraderGroupplease remmeber
your trading forex, if you believe that your account might be exposed to weakness on the USD, its is very simple to hedge your account.
for example.. your the trader above... who had an account in USD, but wished his account was in SGD
if you had a 10k exposure, all you had to do was sell the USD/SGD... and your hedged...
remmeber if the broker does it for you, they will charge you for the privledge, as its extra work for them, you can do it yourself pretty easy.
But it is only possible if we know that at a particular time, usd is weakening. But holding ur account in a stronger currency than usd means at any time if usd weakens, we will get benefit of not openning account in usd.
Stick to your rules
Originally posted by uniquetrader
Originally posted by LonelyTraderGroup
please remmeber
your trading forex, if you believe that your account might be exposed to weakness on the USD, its is very simple to hedge your account.
for example.. your the trader above... who had an account in USD, but wished his account was in SGD
if you had a 10k exposure, all you had to do was sell the USD/SGD... and your hedged...
remmeber if the broker does it for you, they will charge you for the privledge, as its extra work for them, you can do it yourself pretty easy.
But it is only possible if we know that at a particular time, usd is weakening. But holding ur account in a stronger currency than usd means at any time if usd weakens, we will get benefit of not openning account in usd.
But this tip is good if you have already openned an account in a weaker currency.
ya you are right one needs to have a weaker currency