Forex Account Currency
Sometimes also called “Home Currency”, Forex account currency is nothing but the currency in which you maintain your Forex trading account.
Why Account Currency Consideration is Important
Most of the Forex brokers would offer accounts in most of the international currencies or major currencies but still you may like to check if your broker offers the deposit in your currency or not. For example you are from Australia and your broker does not offer deposits or accounts in Australian Dollar then every time you deposit money, you may have to take the burden of exchange rates spread charged by your bank or credit card or whatever money deposit medium you are using.
Account Currency and Margin Requirements
Money management is one of the most critical factors for success in the trading career. It is always good to check the margin requirement before taking any trade position.
Suppose you wish to go for a long position for EUR/USD and your account currency is Japanese Yen. Let’s consider that you wish to take a long position for one standard lot of EUR/USD or 100,000 units of Euro. It simply translates that you plan to buy 100,000 Euro by selling U.S. Dollars as per the current exchange rate. Now as you are maintaining your account in Japanese Yen, you should know what the margin requirement for this position in Japanese Yen is.
Please check about the Margin Calculation.
Account Currency and Commonly Traded Currency Pair
What if I generally trade USD/CHF (U.S. Dollar – Swiss Franc) and my home currency is Canadian Dollar? Is it better to have my account in U.S. Dollar or Swiss Franc?
The above question comes up some times from people who are going to start the trading first time. The answer is “no, it will always be better if you have your account in your home currency”. Of course your margin requirement will be calculated in your home currency as per the exchange rate of the time of trade but you cannot predict whether the exchange rate will be in your favor, every time in you will take a position. What you can predict that every time you will make a deposit, you will have a extra cost burden of the exchange rate.
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