Topic: Trading Charges -- does this look correct?

Can you please look at this screenshot and tell me if these settings look correct? I am on a 5-digit broker who typically charges 2 pips spread (I want mine set a little more conservative at 2.5).

The main reason I'm asking is because the default in FSB for EURUSD is 20, which sounds like points not pips. I changed this to 2 and want to make sure that it is actually treated as 2 pips and not .2

Thanks

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Re: Trading Charges -- does this look correct?

You should set it to 25. You might also want to set the slippage to 10 as well. When I first started with FSB I generated some fantastic strategies and thought I was going to be a millionaire by Christmas. Then I found that the charges needed to be multiplied by 10.

Re: Trading Charges -- does this look correct?

Thanks, but I'd really like to get a confirmation on whether or not the dialog is asking for pips or points (it says pips, but defaults to 20, which is unusual for EURUSD)

I'm developing daytrade strategies and 20 pips spread is not something I want to just guess at. I'd like to think that it is pips (as stated) but I'm not sure how to verify this from the journal.

Re: Trading Charges -- does this look correct?

Look at the individual trades at the bottom of the screen if you want to confirm it.

Re: Trading Charges -- does this look correct?

FYI, I've done a little more investigating on this and pretty much determined that FSB is correct in its calculations and labeling. I also verified this with my broker because I wanted to make sure I was doing this correctly (and math is not my strong suit).

Basically, the way I confirmed it was correct is:
Strategy Properties-> Trade constant # of lots -> 1.0
Market-> Charges-> Spread 2.0

Then in my journal, I noted the correct USD value from trades in the spread column.

IMPORTANT: if you are on a mini account with lot size 10,000, you must change this under Market-> Edit Instruments because the default setting may be a full lot of 100,000.

For mini accounts (10,000 lot size) a movement of 1 pip translates to USD $0.10. So if your spread setting is 2.0, then that should show in the journal as $0.20

(NOTE: it would be helpful if the FSB developers could change the default spread for the built-in instruments to be more typical. For example EURUSD default spread is 20.0 which doesn't seem right. A typical spread should be about 2.0 I think.)

Re: Trading Charges -- does this look correct?

This would only be the case with a 4-digit broker. With a 5-digit broker the spread is correct at 20.

Re: Trading Charges -- does this look correct?

SpiderMan wrote:

This would only be the case with a 4-digit broker. With a 5-digit broker the spread is correct at 20.

My broker is a 5-digit broker. Please provide some more info of your findings.

I don't believe 20 pip spread on EURUSD is correct, assuming you have other details set correctly for the account (such as the lot size).

Re: Trading Charges -- does this look correct?

Have you looked at your results yet?

Also, check out this thread:-

http://forexsb.com/forum/topic/1126/5-digit-broker/

Re: Trading Charges -- does this look correct?

Thanks Spiderman. I will look more closely at the journal but I'm pretty thoroughly convinced at this point that FSB is working correctly regarding the spread charge on my 5-digit 10000-lot mini account. It charges USD $0.20 per 1 lot traded when I have the spread set to 2 pips and take a 1 lot position. This all seems correct to me.

That thread started more than 2 years ago so I'm thinking that issue being discussed has been resolved by this point. The only remaining confusion in my mind is that FSB defaults to a 20 pip spread on EURUSD that I have to manually change to 2 pips.

Re: Trading Charges -- does this look correct?

Yes, by making 1 lot $10,000 you have effectively divided the spread charged by 10 so the numbers will then work out correct.

I actually think the Trading Charges screen should say points rather than pips but who am I to argue with Mr Popov!. One way you can confirm all this is to open FST and have it linked to MT4, then click "status" followed by "Market Info" You will then see the instantaneous values for these parameters displayed.

Re: Trading Charges -- does this look correct?

I actually think the Trading Charges screen should say points rather than pips but who am I to argue with Mr Popov!

HaHa, You SpiderMan and everyone can argue with me about everything. I'll be more than happy to learn something from you and eventually to change my mind.

I'm almost ready to accept renaming of Pips to Points in FSB User Interface. And most probably will make something in that direction.
My concern is that a Pip is the smallest value of the price that can be changed. So that, 1 Pip is 0.0001 for 4 digit broker and 0.00001 for 5 digit broker. 1Pip should be = 1 Point.
But recently, after massive change over to 5 digits, the brokers started speaking about fractional pips.
Something like 1.22553 = 1.2255.3

I found these two definitions now:

Points - A point is the largest of the three terms, and is the smallest possible price change on the left side of the decimal point. For example, the ES futures market might experience a price change from 1314.00 to 1315.00, which would be a price change of 1 point.
    Ticks - A tick is the smallest possible price change for the market in question, and may be anywhere on the right side of the decimal point. For example, the ES might experience a price change from 1314.00 to 1314.25, which would be a price change of 1 tick.
    Pips - A pip is the same as a tick (the smallest possible price change for the market in question), but is specifically used for the Forex markets. For example, the EURUSD (EUR to USD currency market) might experience a price change from 1.2500 to 1.2501, which would be a price change of 1 pip.

A “pip” stands for “Percentage in Point”. A pip is the smallest price movement of a traded currency. It is also referred to as a “point”.

For most currencies a pip is 0.0001 or 1/100 of a cent. You may think it is a ridiculously low value. However, take into account that most currencies are traded in lots of $100 000. For that amount a pip is $10.

We have to make a final decision how much is 1 Pip for 5 digit broker.

Re: Trading Charges -- does this look correct?

The main reason I'm asking is because the default in FSB for EURUSD is 20, which sounds like points not pips. I changed this to 2 and want to make sure that it is actually treated as 2 pips and not .2

Please see Bid and Ask prices of your broker. If they looks like 1.25555 and 1.25557. The spread you have to set is 2 Pips. If the prices are 1.25555 and 1.25575, the spread is 20 pips.
5 digit =>  Spread = (Ask - Bid) * 100000
4 digit =>  Spread = (Ask - Bid) * 10000

...

Forex Strategy Trader will show you the spread on the Status page.

Re: Trading Charges -- does this look correct?

Popov wrote:

We have to make a final decision how much is 1 Pip for 5 digit broker.

As a suggestion, why not leave it as pips, default it to 2 (for EURUSD) but have another tick box for 5 digit broker. If 5 digit broker is ticked, then internally mulitply by 10 to give the correct spread for doing the calculations.

Re: Trading Charges -- does this look correct?

SpiderMan wrote:

Yes, by making 1 lot $10,000 you have effectively divided the spread charged by 10 so the numbers will then work out correct.

I actually think the Trading Charges screen should say points rather than pips but who am I to argue with Mr Popov!. One way you can confirm all this is to open FST and have it linked to MT4, then click "status" followed by "Market Info" You will then see the instantaneous values for these parameters displayed.

Well, my own greatest concern with this theory is that if the lot size is $10,000 (Mini) and 1 pip equates $1, then 3 pip spread is $3 right?
Then why is the trading result showing full lots value ($10 per 1 lot).
For example, A winning trade of 42 pips shows $417 profit...this means 1 pip equates 10usd for the trade, but the 3 pip spread equates $3.
This does not add up, I think the spread should also show $30. (then the actual result would be $390)
Now, if I attempt to reduce the lots digits to 4, then the opening price will not correlate again with my
brokers prices.
The best way I am somewhat satisfied...even though it dealt a great blow to all my great looking results is if I change the spread charging digit to 30 (for a 3 pip spread) and I change the lot size to $10,000, instead of $100,000.
This way when I make a 20 pip gain on a mini lot trade, then I have $17usd..I think thats the true result...right?
But, please Mr Popov, can you make the whole process a whole lot simpler and straight forward for a not too observant newbie...before he jumps out, waving a "found it" strategy!!!!!!
Thanks all!

Re: Trading Charges -- does this look correct?

wtoalabi wrote:
SpiderMan wrote:

Yes, by making 1 lot $10,000 you have effectively divided the spread charged by 10 so the numbers will then work out correct.

I actually think the Trading Charges screen should say points rather than pips but who am I to argue with Mr Popov!. One way you can confirm all this is to open FST and have it linked to MT4, then click "status" followed by "Market Info" You will then see the instantaneous values for these parameters displayed.

Well, my own greatest concern with this theory is that if the lot size is $10,000 (Mini) and 1 pip equates $1, then 3 pip spread is $3 right?
Then why is the trading result showing full lots value ($10 per 1 lot).
For example, A winning trade of 42 pips shows $417 profit...this means 1 pip equates 10usd for the trade, but the 3 pip spread equates $3.
This does not add up, I think the spread should also show $30. (then the actual result would be $390)
Now, if I attempt to reduce the lots digits to 4, then the opening price will not correlate again with my
brokers prices.
The best way I am somewhat satisfied...even though it dealt a great blow to all my great looking results is if I change the spread charging digit to 30 (for a 3 pip spread) and I change the lot size to $10,000, instead of $100,000.
This way when I make a 20 pip gain on a mini lot trade, then I have $17usd..I think thats the true result...right?
But, please Mr Popov, can you make the whole process a whole lot simpler and straight forward for a not too observant newbie...before he jumps out, waving a "found it" strategy!!!!!!
Thanks all!

Experience using the software will show you many things. This is a complex software with many metrics to be aware of.

My 'secret' goal is to push EA Studio until I can net 3000 pips per day....