Account currency conversion: the fee inside the fee

[Amanhasnoname]

Trading a pair where neither currency matches the account currency means every profit and loss gets converted. Brokers apply their own conversion rate, and a markup may sit inside it.

A euro-denominated account trading USDJPY converts yen profits to euros. A small markup on that conversion is rarely shown on the statement as a separate line. It just makes the result slightly smaller or the loss slightly larger.

For a scalper with hundreds of trades, those fractions add up. Even 0.1 pip equivalent on each conversion is a visible cost across a month.

A way to check is calculating a trade's expected profit using the market rate for the conversion and comparing it with the credited amount. A few examples over several weeks show whether the gap is consistent.

Opening an account in a currency that matches the main pairs traded removes most of the conversion. For many, that means a dollar account for dollar pairs.

Some brokers offer multi-currency accounts to reduce the effect, though terms vary.

Does the account currency match the pairs traded, and has the conversion cost ever been measured?