After ‘test driving’ many different brokers, I’m really starting to like Oanda and have been trading demo for a few weeks (so far) with pretty constant profits. Anyway, Im just trying to get a few thoughts clarified regarding the table with the info about my balance, margin used, realized and unrealized p&l etc to the left of the main currency chart (labeled “Account Summary”).
First off…I know the difference between realized and unrealized P&L but am unclear if this is the P&L with the margin or without. For example, if it says $100 realized P, does that mean I will fully be able to withdrawl $100 (*not saying I would), or will I have to compensate for my lets say 40:1 margin and take whats left as profit?
Second, when it says “balance”, is that the exact same amount that I would deposit in the acct, or is it that balance plus the leverage I am using?
Third, the term ‘margin available’ is pretty self explanatory but can someone please explain how it works in context to the balance I am seeing?
Fourth, under the activity section I am seeing ‘interest payment’. Why is this sometimes positive and sometimes negative? How is this being earned/lost?
Lastly, why is my balance and realized P&L different? If they are in direct correlation with each other, shouldnt every penny of profit be added equally to my balance - and vice versa for loss?
I honestly appreciate, and thank you, for the assistance in advance - just trying to clear things up.
The Unrealized P&L listed is without the margin included.
The balance is the dollar amount you have deposited without leverage.
The Margin Available is how much you have available of your Balance to actually use to trade with. So if you have a balance of $1000 and have $400 tied up in open positions- your Margin Available would be $600.
Different currencies have different interest rates. OANDA pays out a small amount of interest on your balance and debit/credits your account when you close a transaction based on whether you would have to be paying interest or not on the currencies of the pair you were trading. So for example, let’s say you’re trading EUR/JPY and your account is in USD. If you wanted to short- then your USD would need to be put against the Euro. The interest rates of the Euro need to come from somewhere- so you end up paying for it when you close the trade. However, if the interest rates are in your favor; you get the difference credited to your balance. (Note: I might have got this slightly wrong but I’m pretty sure that’s the gist of it based on the help. Here’s a link if you want to read it yourself. Interest Rate Calculation | OANDA fxTrade )
To get the obvious out of the way- your balance isn’t P&L so it wouldn’t be listed there. However- the interest payments may not be calculated into your P&L since they aren’t technically a trading P&L.
My question would be- how different is the balance and the realized P&L? Also, realized P&L and balance only change once your trade is closed. So there is that too.
Thank you for the response, greatly appreciated. I forgot I never replied to this thread…
I am still however, slightly confused as to why my profit/loss would be added to my balance that includes compensation for leverage?
Maybe if I were to break it down it would make more sense…
What I was planning to do was initially deposit my funds and trade off that for a while. When I start to see more constant profit, I was planning on keeping roughly 75% of it in the account and simply withdrawing the other 25% or so for personal use.
Now lets say in the profit/loss box P=1000 (for simplicity), this would equate to 750 being kept in the account and 250 for personal use. Would I be able to ask for payment from a broker for the 250 or will my actual profit be after I compensate for the leverage on the profit&loss?
Im sorry for being so redundant, I just cant grasp this concept of lets say $500 being turned into $25,000 and being able to take the whole profit from trading the $25,000 - it almost seems to good to be true.
[QUOTE=stonecoldmichael;511659]Let’s see if I can get some of these cleared up.
The Unrealized P&L listed is without the margin included.
The balance is the dollar amount you have deposited without leverage.
The Margin Available is how much you have available of your Balance to actually use to trade with. So if you have a balance of $1000 and have $400 tied up in open positions- your Margin Available would be $600.
[QUOTE]
As from the example above as long as your withdrawal ($250) did not leave your account in jeopardy of
sustaining a margin call from any open positions you can do this.
What I still have trouble grasping is the fact that the “account balance” in Oanda is the total leveraged amount of funds and the profit/loss gets added directly to it. Yet I am able to withdraw the profit amount without compensating for any leverage? Im sorry for dragging this on but I cannot wrap my head around this idea…
Profit/loss will be added to your account balance when you close your trades. Whatever is in your account balance, you can withdraw that unless your equity is less that your balance while a trade is still open and fund required to run that trade. Sorry if I have misunderstood what you actually want to know.
Rather than looking at the account balance figure you need to be looking at the margin available figure.
If the figure you want to withdraw leaves the margin available figure
in peril of receiving a margin call, you will not be able to continue with the transaction.
In fact any transaction which leaves your margin at risk will not be allowed.
Ive only been demo-ing for about 3-4 months now. Recently, someone on here suggested putting $50 into a live account to see how it goes and then adding more after being comfortable trading real funds. Any objections? I’ve been strongly thinking about doing this. (Oanda has a 2% max risk with this amount I believe.)
[QUOTE=“daydreamer65;541467”] Just how I started. I deposited $200 into Oanda & traded 1 cent/pip. It just gets you into the psychology of trading real money. You then increase your cent/pip when you are comfortable in doing so.[/QUOTE]
Perfect, thanks for the insight.
Pardon my math skills but how did you get 1c/pip from a deposit of $200? Im assuming it is a given because you were trading micro-lots?
Now the decision…I believe $50 is on the little side for an investment but have no objections to doing it. Maybe $100 or $200 to start off would be a better idea? Anybody else start off like this (and what was the initial amount?)
Also, if I were to deposit lets say $100, for simplicity’s sake, and risk 1% on the trade thats a total value of $1. How would I size this to determine how much I should buy in the market? Im almost complete with the BabyPips school (which is phenomenal), but would make sure I am sizing my positions 100% correct.
To work out your loss for each trade as you have written, divide by 100
ie 50/100 = 50 cent loss per trade. Therefore you can then divide the amount of
pips you think you will lose into 50 cents
ie for ease of calculation 50 pip stop loss = 50/50 = 1 cent/pip.
You always need to calculate loss first, how much am I going to lose if…
Then calculate profit 1x, 2x, 3x etc.
That is the beauty of Oanda’s market window you can see the complete trade set out
before hitting go. Units, stop loss, take profit, trailing stop, margin used, etc.
Will be funding my account tomorrow. Pretty much decided to start off with $100 to get into the swing of things and will progress from there as opposed to my original plan of depositing the whole amount I set aside to trade with.
Appreciate all the help, I know Ill be asking more questions as time progresses.
Just a quick note since you are starting live trade:
You can trade some pair like USDJPY, AUDUSD with as little as $11 for 0.01 lots. So $ 50 is enough to start. You can start with EURUSD with $14 for .01 lot, this is a good pair to begin I personally feel.
Appreciate the advice. Ive been mainly watching euro/dollar when I was (and still am) demo-ing, definitely will continue when I go live - its a very predictable pair with some decent movement, and low spread.
Okay so I finally got around to funding my account, albeit only a very small for now, but have a question as to my account balance/margin balance my account is displaying.
I only deposited $100 so I could trade for about a week, simply to get into the feel of dealing with real funds. My deposit was acknowledged and credited to my account by Oanda; however, I’m only seeing $100 available for my account balance, and margin available - even though my leverage should be 20:1 (by default, haven’t altered it in any way yet).
When I was demo trading, I changed the settings to an initial deposit of $500 and leverage of 50:1 and my account balance was at $25,000.
Bottom line, how come I am not seeing any leverage in my account balance or margin available - I assume I should be?