IB - Forex trading

Discussion in 'Order Execution' started by trade4ever2day, Nov 27, 2007.

  1. Hello,

    Anyone with experience with the IB FX Trader?

    It seems to me that every time you do a long trade with USD as the base currency, like for example going long USD/CAN, you get your P/L in quoted currency. Like in my case I did 25000 USD/CAN long at 0.9895 and then closed the position at 0.9907. Is this the way the P/L is normally stated?

    My 30 pips profit was in CAN dollars and I had to use their IDEAL currency converter to get it back to USD. I ended up with less than 30 USD after doing that.

    Something does not seem right about this and it is certainly not the way it is done by other platforms.

    Any suggestions/explanations? I am sure some of you have experience with the platform. I'm just trying to learn it.

  2. DerekD


    Yep. That's how it is when USD is listed first in the pair. And it gets worse. You'll probably never zero out the CAD in your account completely.

    I had that issue when I traded USD/JPY. I had some Yen in my account that I could never bring to zero. It's really no biggie but it annoyed the heck out of me so I closed the account and opened a new one. Closing the account seemed to be the only viable option for me at the time.
  3. Yes, not able to zero. Very annoying. I think IB Forex costs much more than people think. I am ready to close my account. These conversion issues are taken care of automatically in other platforms at the same rate the position is closed.

  4. DerekD


    IBs Idealpro is great when you trade EUR/USD & GBP/USD if your base currency is USD. These are the most liquid pairs they offer anyway.

    And with Forex, as with anything, liquidity is your friend.

    Also bear in mind that IB is an ECN and not a dealing desk. There's an advantage to that in that they do not "trade against you." They simply match orders and collect a commision. They have pretty good liquidity on the above mentioned pairs and have about 10 major liquidity providers. You should be able to move 5 million and 10 million EUR/USD no problem except during major news releases.
  5. ronblack


    Being an ECN does not automatically preclude trading for own account, as far as I know. As a matter of fact, IB in their customer agreement state that they may take opposite positions than their customer's.

    That does not mean that much though. Some broker may trade against a customer and lose money. The problem arises if they come back and cancel your original order as some bucket shops often do. IB won't do that for sure.

  6. TGM


    They automatically do it now when you have just a little bit of some currency in your account. Thank god.

    You can hold multiple currencies in your account. You don't have to take everything back to your base currency. There is no penalty for holding 30 dollars Canadian and then going back to your base with profits once a month or so. But I agree it is confusing for forex traders who are used to Oanda and FXCM. Wait till you trade crosses like EUR/JPY and pay double margin.
  7. ronblack


    Isn't the conversion back to base currency going to cost you if the quoted currency has fallen in the meantime?

    I think with IB you end up paying credit card exchange rates on your profits on foreign currency. This may be the reason they can offer such low spreads in some pairs and still make money.

  8. TGM


    I think it goes both ways. If you got big profits in euros and want to get back to dollars because the euro is going to dive....yeah the extra 2.50 is not going to hurt you. I used to agree with this. But I think it works both ways depending on the ongoing trends. No they do not charge credit card rates. Seems to be about the same as Ideal Pro. But it does matter the amount of the profits you are converting.

    IB is not for small forex traders. It is not horrible for small forex these days (it used to be). But it is no Oanda. Ib is just not designed for small traders and they dont want them.
  9. It would be nice to skip the double margins on non-USD pairs.

    How about fixing that please IB?
  10. mister_x


    Kind of a silly question....but how do you "go back to your base" with your profits in some other currency like JPY? How much commission is involved in that conversion?

    As you can tell, I'm a newbie to Forex with IB so any insight would be appreciated....
    #10     Nov 27, 2007