Which Base Currency; trading GBP/USD From the UK?

[RobM.]

Hi everyone

I am entirely new to FOREX trading and slightly confused as to which base currency may be best for funding my trading account, living in the UK.

I am currently experimenting (using a demo account) with good and steady results, using an Expert Adviser. However, its money management facility assumes USD. Hence, trading, eg, with £2000, 2% risk, 0.1 lots and a 40pip stop-loss, I am finding that on losing days, because the broker converts P&L back to GBP, my actual loss is (at 1.61) £24.84. Obviously this is not 2% of £2000 and therefore my profits are commensurately reduced too.

I understand fully that this is a result of the trading currency being USD but can't decide (ie work out the consequences, if the truth be known) if I shouldn't just fund a live account, when the time comes, with USD. That way everything is in dollars and calculations are correct with the money management percentage etc.

Would somebody be kind enough to comment on the pro's and cons of doing this, and any other options?

Many thanks.

 

[Rhody Trader]

Generally speaking, the easiest thing for you to do is use your domestic currency. It makes the accounting easier. Moreover, if you use another currency as your account base then you are essentially taking a long-term bet on that exchange rate. If you're new to forex I'm thinking that's not something you're equipped for at this point.