I have almost no experience with forex, but would like now to place a trade with IB, shorting sterling. Can someone tell me how much it costs with IB, the minimum trade/unit size, and what amount of leveraging is allowed (alternatively, a link with IB). Thanks in advance.
cost $2/$100k (.00002) with a minimum commish of 2.50. i.e. short 100,000 sterling = $149,120 (est close of 12/08/08). Cost = .00002*149120 = $2.98. Minimum size on Ideal Pro is $25k. Margins are 2.5% on most majors (40:1) but margin is calculated 2x if trade is not in base currency, i.e. USD account, short GBP/JPY - margin is taken as if GBP/USD trade AND USD/JPY trade. http://www.interactivebrokers.com/en/trading/marginRequirements/margin.php?ib_entity=llc IB TWS is not the best front end to fx trades especially if you are used to other platforms. I use Ninja Trader. Others use buttontrader.
Most fx has point n click interface for ease of order entry. After having worked on Currenex and Hotspot and various other MM brokers, switching to TWS took some getting used to since it is geared more toward keyboard entry then mouse. By using Ninja, I am able to enter my TP and SL's at entry plus has better charting ability. Not trying to be a shill for Ninja, but since using it with TWS, it has made the switch from Hotspot much easier. Just my opinion. What is more important are the issues you raised concerning costs and margins. Costs and spreads are some of the best in the business plus has the safety of not becoming a victim in another Refco. But the margins can be frustrating. I like to trade NZD, but IB's margins are 20:1.
cstx, you should look at our FX trader. Point and click for the pairs you set up. I think it addresses what you're looking for in terms of view-ability and point and click. http://individuals.interactivebrokers.com/en/software/pdfhighlights/PDF-FxTrader.php?ib_entity=llc
I've used the FXTrader. It still pales in comparison to Currenex or Hospot. There is more functionality on them. I have found that the front end I mentioned makes my trading thru TWS easier. Just my experience.
I recommend that you have a play around with this profit/loss calculator on the Oanda site: http://fxtrade.oanda.com/tools/fxcalculators/profit_calculator.shtml If you're not familiar with forex pip values, it's a simple, easy way to work out what you're risking on any particular trade size - using your s/l and t/p levels as the closing price.
Thank you. Just tested it now. For 100k units, to short at 1.47527, and to close at 1.45527, it shows a profit of 2950.54, which makes sense. If I placed this trade with 10% cash, held it for one month, will I be paying interest on the other 90% or not. (Note: I acknowledge the comment of cstfx about the comparison to futures, but have never traded futures either.)