CMC and forex trading

[kodex750]

Hi Everyone

I'm new to forex. Still in the learning phase.
My plan is do a few day trades with AUDUSD spot.
So...I've opened an account with CMC markets and had
a chat with client support. They said the min trade size
for my desired instrument is US$10,000 and margin is 0.5%
which is all good.

Now..I was also told that even after I close all my positions
for the day, the equity in my account would still fluctuate
since the p/l is in USD. And I cannot do a balance conversion
till their "End of day process" which is at 7:00am sydney time.
So that means it could still eat my profits if something goes wrong..

Does anyone else here use CMC markets to trade forex?? How can you make money if you can't do a bal conversion straight away? It doesn't seem right!

 

[Trembling Hand]

Mate it's only the P&L thats still in USD.

trading $10,000 lots that means you are going to have probably $100 open USD. Its no big deal. Its not the whole trade amount its just the P& L do the calculations and it unlikely that you will have a fluctuations of a dollar or two on theses amounts.

And by the way this is the same for any trading when you cross FX boundaries.

 

[kodex750]

Thanx for the reply Trembling Hand.
I get it now. Also....is it safe to use cmc
as a forex broker if you plan to do full time
day trading??

 

[WRONG'UN]

Be very careful when you do a balance conversion - double check that you are converting in the right direction, otherwise you may accidentally convert your entire trading account into USD, and you then have to convert it back again, at a much higher spread than in normal trading. (I've only done it once)

 

[tayser]

That's almost scandalous.

Trade #1: BUY AUD/USD 10,000 @ .6789
Trade #2: SELL AUD/USD 10,000 @ .6794

Pip profit/loss: +5
Pip value: $1USD
Profit in AUD at the time of closing the position (when your P/L should be converted to your account's denomination which I am assuming is AUD): 5 * (1/0.6794) = $7.35

Assume the AUD/USD rate rises 200 pips from the time you closed that trade to New York close (approx 7am AEST).

$5USD * (1/0.6994) = $7.15AUD

big deal you say? HAH!

Now lets assume you work up to significant significant equity and you're trading 5,000,000 lots ($50,000 account):

Trade #1 BUY AUD/USD 5,000,000 @ .6789
Trade #2 SELL AUD/USD 5,000,000 @ .6794

Pip profit/loss: +5
Pip value: $500USD

Profit in AUD at the time of closing the position: 2500 * (1/.6794) = $3679
Profit in AUD with 200 pip adjustment: 2500 * (1/.6994) = $3574
Diff: $105AUD

That's a bloody rort.

 

[WRONG'UN]

If the exchange rate goes the other way, it can go in your favour. An unconverted balance in effect becomes another open trade.
Being able to convert as soon as the profit/loss is incurred would eliminate this uncertainty.

 

[1080p]

CMC seem to have larger spreads than normal? All majors used to be 2 pip spread but at the moment AUDUSD spot is 4 pips, EURUSD is 3 pips etc

I checked their site but it still says 2 pips for majors...

 

[prawn_86]

Any provider can have wide spreads at certain times. Volatile conditions and news releases generally widen the spread

 

[1080p]

Its odd. I've had an account with them for more than 6 months and the spread has never changed from 2 pips no matter what time of the day/night or volitility.

It must have something to do with the 'crisis' meetings they had last week...

 

[everyonerich]

why so many aussie are trading aud/usd pair? as for newbie, in my opinion, generally they should stick with major pairs first.

 

[professor_frink]

why so many aussie are trading aud/usd pair? as for newbie, in my opinion, generally they should stick with major pairs first.

well I wouldn't exactly call it an exotic

 

[>Apocalypto<]

why so many aussie are trading aud/usd pair? as for newbie, in my opinion, generally they should stick with major pairs first.

Ha Ha Ha

It is a Major.........

 

[everyonerich]

Ha Ha Ha

It is a Major.........

i thought major pair suppose to be eur/usd, gbp/usd, usd/chf & usd/jpy... nvm...

 

[>Apocalypto<]

i thought major pair suppose to be eur/usd, gbp/usd, usd/chf & usd/jpy... nvm...

and the eur/gbp and the aud/usd and u have em.

the aud is fourth in most traded currencies.

 

[tayser]

Majors (narrowest spreads):

EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
NZD/USD

The "major crosses" are:

EUR/GBP
EUR/JPY
EUR/CHF
GBP/JPY
GBP/CHF
AUD/JPY
CAD/JPY
NZD/JPY
CHF/JPY

Exotics (widest spreads):

USD/DKK
USD/SEK
USD/NOK
EUR/DKK
EUR/SEK
EUR/NOK
USD/TRY
USD/ZAR
USD/SGD
USD/HKD
EUR/AUD
GBP/AUD
AUD/CAD
AUD/NZD
AUD/SGD
and so on and so forth.