I’ve been trading ETFs with TD Ameritrade’s thinkorswim platform for about 6 months, and I recently started trading FX because I want to trade at a time more convenient to my schedule than 2am (I currently live in Sydney)!
My question is this: I took my first trade on GBP/USD and was confused by a negative P/L when the price action is clearly above my entry price… I know that TD Ameritrade’s spreads can be pretty high but how does this explain this discrepancy? I never saw this trading the stock exchange:
erm, the difference between your average entry price and current price is of 1.8 pips. Which is extremely small.
So yes it could very well be the spread.
You have to check the bids and asks.
Hey! Thanks for the reply. I may be misunderstanding the spread, but at that moment the bid and the ask were both above my average price, and in fact the trade didn’t break even until about 8 pips above my avg entry price. I just want to know if this is normal… If so I’ll need to start taking longer trades with more than a few pips to the upside/downside, since 8 pips wiped out about half my profit from this trade. Granted this was just a test with a really small amount but still
Is this position held overnight or longer? If so, it’s just not the spread you have to factor in, but your financing costs, also known as “rollover fees” or “swap fees”.