Hello all. I am trading Forex (paper-trading) with IB, and my account is in USD. One issue I encounter is the lack of clarity as to my P&L. If I close say a trade on AUDNZD, my P&L is shown in some 'weird' amount other than USD, and it's quite confusing to work out my actual P&L in relation to my account balance etc. IB seems to derive pleasure in making things arduous and complicated than they should be! Why they can't just show your P&L in your account's currency like everyone else is anyone's guess. My question is does anyone know of a free program that can download my statement and display it in a clear and easily comprehensible way and with all my trades P&L displayed as USD? Many thanks
The foreign currency is not weird at all - that's your true P/L. In fact it's not even USD until you convert it to USD. You can go months trading in another currency before you even realize it in USD and in that time said currency's relationship to USD most likely will change. So by showing it as USD equivalent it'd only be hypothetically valid for that moment if you converted immediately - which is a dumb thing to do due to commissions.
Hi i960, Thank you for your response. By "So by showing it as USD equivalent it'd only be hypothetically valid for that moment if you converted immediately - which is a dumb thing to do due to commissions.", are suggesting it is better to leave it as it is (in the foreign currency? If that's the case, how can I show it in USD (my account currency) so I can keep track manually and mentally my P&L. Showing a P&L of -23,543.00 for example against say CADJPY on my statement does not really make it clear to me how much I have lost (or gained) in dollar terms. If compared to other Forex brokers, your P&L is permanently displayed in your account currency so that at a glance you are clear about unrealized and realized P&L.
IMO you're focusing on it too much as money you've WON or LOST. Just treat it as a number with a rough idea of what it converts to in USD. Also if you look at the account window in TWS you'll see the difference in gain/loss by checking the delta between your USD balance and the FX-affected balance. Look at the sub totals. No need to convert it unless you need it for other margin or interest is accruing too much.
It is not just IB, even Dukascopy, one of the most reputable retail forex broker, is the same. Only the bucket shop brokers mainly using Metatrader 4 will show the profits in USD (or your account currency).
i960 and Carrer, thank you for the responses. Point taken and not really here to argue the pros and cons. Just after a way, for my own comprehension, to see my realized and unrealized P&L in USD in relation to my account currency ('the way the bucketshop brokers show it on MT4'). Is there a free program to facilitate this or could you advise of the manual calculations involved in converting say my P&L on a AUDCAD trade to its dollar equivalent. So for example my P&L is showing something like -35,545 on a AUDCAD trade, what is this in dollars? Thank you
I'm gonna slightly hijack this thread; related issue & one that has been loosely addressed in previous threads (although not conclusively). For stock trading and particularly in foreign currencies, eg asx, tsej, sehk... TWS P&L is not accurate at all & sometimes way off. ... So I assume that this is only a "display" glitch in TWS but the actual accounting will be correct. Researching this topic I have read that one should just accept that TWS numbers are not accurate (crazy I know), and trust that the bottom line accounting will be accurate. As most, I have not the desire to spend hours auditing my broker. But the disturbing thing is that the (displayed) error is ALWAYS not favorable to the account holder. ...And please don't bother with the "you should contact your broker"... This is IB we are talking about.
NoVoodooHere, you are quite right. Deciphering your IB statement to actually comprehend your P&L (realized or unrealized) when trading Forex requires a Phd in advance accounting! Like you have also intimated, if one cannot easily manually/mentally monitor one's P&L, how would one be able to identify any errors (these things do happen, though rear) in one's statement!
The reason it's difficult is because it's in a foreign currency - further complicated by cross-pairs. Not really an IB issue.
There is an option in TWS settings to display the trades' P&L in your base currency. When you enable it, your CADJPY trade will be shown in USD in italics. Unfortunately, this only applies to the P&L display in the portfolio and the rest pages, e.g. Pending. In the trades log there is not even mention of forex P&L, only futures. The worst is that for forex trades in the portfolio page, you only get the absolute gain/loss with commissions not accounted for! So by the end of a busy day you could be +1000, but only +400 after commissions. You have to keep track of that on your own. This is not the case for futures trades, where the P&L includes all commissions.