Forex Profits & exchange rate risk relative to my Base Currency

Discussion in 'Forex' started by N54_Fan, Mar 10, 2012.

  1. N54_Fan

    N54_Fan

    This is for all Forex traders out there.

    I am NOT new to trading as I have developed a system that is profitable with stocks. I AM new to Forex and trading the same basic system. Luckily I have had some profits in this short 3 weeks and now I have an issue I am not sure how best to resolve.

    The profits I have are still in the "settlement currency" and I am not sure how best to handle this. Right now I have substantial profit in CAD and in CHF. As these are not in my base currency of USD I have profits that are now subject to "exchange rate risk". So as the CHF and CAD fluctuate in price and if they go lower relative to the USD I will be eroding some of my profit. I think this is especially important now because I think USD is breaking out to increase in value. I still plan to trade all common currency pairs for the foreseeable future.

    QUESTIONS ARE:
    1) Should I leave these profits in the settlement currency (CAD and CHF) since I plan to just trade these in the future?

    or

    2) Should I be exchanging these profits back in to my base currency of USD periodically or even when closing any position? I was thinking of BUYING USD.CAD in the proper proportion to get my profits back into USD.

    Any input is appreciated...Thanks in advance.

    N54_Fan