Forex Blog: Important Forex Tip – What’s the currency held in your broker?
This is one very important thing that every forex trader should know.What’s the currency that you hold in your forex broker account?Regardless of which country are you living in.Your currency denominator in your forex account should NOT be in USD.This may come as a BIG Shocker to you.And if your denominator is in USD. Change It Now!
Forex Blog: Important Forex Tip – What’s the currency held in your broker?
Here’s why:
My Example: I’m based in Singapore. Around 2-3 years back, the USD to SGD (singapore dollar) is at the rate of 1 : 1.4 (est)
Forex Blog: Therefore $1 USD is equals to $1.4 SGD.
Forex Blog: But today $1 USD is equal to $1.1~ SGD.
So had my forex account denominator be held in USD. I will be making a huge loss!Just for example. If your capital is $100,000 USD 3 years back, if i convert it back to SGD. It will be $140,000 SGD.And supposedly, if i never traded the account. Today my capital left will be $110,000 SGD.Meaning i made a loss on my account even though i did not even took a single trade!
Do you see what i’m driving here.Even though if i had traded the account, my profits would have been wiped off or massively reduced due to the currency difference.Which also means that you are practically wasting your time trading forex as none of your profits could be seen.
Forex Blog: Important Forex Tip – What’s the currency held in your broker?
So what now?
Forex Blog: Here’s the fact.
The USD will continue its way down, unless there is a chance of them clearing the trillion of dollars in debt. (chances are really slim)Til then, the USD will at least not grow back to what it once was.So if you are living outside of the United States.You should either put your currency in your own country’s denominator or place it in a country which has a stable economy (eg. Singapore is one of them) And if you are living in the United States.You should change your denominator to another country which has a stable economy. (Not EUR – due to its mounting debt)
Some brokers will not allow the change if you are living in the United States but some will.So if those brokers doesn’t allow you to change your denominator to other currency.
CHANGE THEM!
Forex Blog: Important Forex Tip – What’s the currency held in your broker?
Forex Blog: By changing your denominator to other currency, and if the usd continues falling against the currency you put in.You will see a growth in your capital without even trading!So that’s Extra Profits! (or even to cover your losses you made through silly mistakes)Let me know if this post has helped you.Do share it and like it! Cheers!
Check out our online forex trading AFM forex blog winning Price ActionForex Course where i teach you the exact FULL Forex Day Trading Systems & Strategies that i personally use to be consistently profitable.
See you on the other side my friend,
Asia Forex Mentor
Ezekiel Chew
Asia #1 Forex Mentor
www.asiaforexmentor.com
Next Beginner Article: Basic Forex Trading Psychology
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Thanks Ezekiel. Something to include in the business plan. Is there any merit in having more than 1 account in different currencies for holding your money aside from your trading account? Assuming you’re a successful trader!!
I don’t really think there’s more merit. =)
Generally just 1 currency will do, the basis behind this is not to lose money.
Which means No to USD. =)
Hi Guys,
I had the same thought thats why I simply hedged my USD account agains the CAD (I live in Canada) Just simply take a sell position of USD/??? in the amount of your account and you are good to go! Now regardless of what happens im safe. Hope this was useful to someone.
Cheers
Something to think about seriously. Never thought about it before. Thanks Ezekiel!
Hi, do you know of any decent software that helps in Forex / Binary trading? Most of the “Reviews” available on the Internet are affiliate links
Thanks
I’m not sure what software are you looking for.
If you are looking for automated trading software. Then i can say 99% out there will not make what they claim it will do.