Hi All,
What is your recommendation regarding account base currency? I am planning to trade the EUR/USD pair, but my regular bank account is in CHF. Would it be stupid of me to set my trading base currency to CHF as each time I would open or close a trade, it would be subject to additional currency fluctuation? Should I rather set my account currency to EUR or USD? I am going to trade with Oanda, btw.
Thanks for your help or advice!
Cheers,
Sascha
That depends on your holding period. If you’re trading short or intermediate term (hours to days), the effect is usually negligible. It’s best if you setup a simple spreadsheet and run some calculations to see the effect of keeping your account in CHF or something else.
Secondly, if you keep your account in another currency, you’re also at the mercy of currency fluctuation as you’ll eventually have to convert the money back to your home currency. So it’s basically a matter of keeping it for a very long term (if you use another currency) vs. a short term (keep account in your own currency).
Just some scenarios to consider in your calculations.