When you close a position in USDJPY, is there a special way to do it? When I enter a position I go in with .1M and when I exit I come out with .1M, but with IB my profit is leftover in YEN. There is no way to change the yen back to dollars because the fee is greater than what I have. Ive read somewhere that this is one of IBs scamming techniques. Is this really one of IBs many bullshit scams?
IB use a portfolio margin system - which means you don't need to convert any profits into your base currency for it to be useful as margin. You would only need to do this if you want to avoid currency fluctuation risk. Most traders wait until there is a significant amount of foreign currency before converting, to lessen the effect of the 'Ideal' commission. But if you have less than $5 worth of yen, why bother? - perhaps next time you should try and make more than half a pip profit...
I guess saying the fee is greater than what I have was exaggeration, but Im not willing to pay for extra shit here and there. There is a $30000 minimum to make an order on idealpro and there is a ridiculously huge spread in ideal. I dont have $30000 worth of yen, but I have enough to piss me off in the spread.
I'm surprised that the spread bothers you that much, it's still ten times less than the spread you'd pay converting through a bank, or credit card transactions. - they're the ones that piss me off!
The question is: why is my profit left over in Yen in the first place? The reality is that IB charges commissions for trading USDJPY, commission for changing Yen to dollars plus commission for trading on IDEAL.
Your profit is left over in Yen because you traded USD.JPY. If you want your profit in USD, you need to trade JPY.USD, only that's not the standard convention used in the forex market. The alternative is to calculate how many dollars you should buy/sell to exit a trade and clear out all of the yen. Set up your order in this way. For example, if you buy $100,000 at 90.00 yen, you would need to sell $98,901 at 91.00 yen. This will leave $1,099 USD profit in your account (less commissions) and only a few yen. Of course, if you change your sell price, you need to recalculate your amount. It's a pain.
The procedure above is even easier if you use a front end like Buttontrader, which with one click can combine a small position of a currency with a larger order on IdealPro, thus you pay only one commission and minimum spread (same result as the post above, but the software does it for you).
I guess you get what you pay for. Besides having crappy software, no customer support and lack of historical data, IB cant be beat. Im gonna check out buttontrader, but Ill probably implement the conversions into my strategies. Thanks for the info!