Currency Conversions?

[jeronymite]

Scenario 1:

• Sim101 balance is USD 100,000
• Enter Long on BTCUSD at Ask price 50,000 with Quantity 1
• Exit Order at Bid price 50,001
• Price delta is USD 1 on Quantity 1 == profit in money of USD 1.00 (exclude all overheads)
• Sim101 balance is now USD 100,001.00

Scenario 2:

• Sim101 balance is USD 100,000
• Enter Long on BTCGBP at Ask price 35,000 with Quantity 1
• Exit Order at Bid price 35,001
• Price delta is GBP 1 on Quantity 1 == profit in money of GBP 1.00 (exclude all overheads)
• GBPUSD Rate is 1.5000
• Sim101 balance is now USD 100,001.00

Questions:

1. Why does Scenario 2 result in the same change in Sim101 account balance as Scenario 1?
2. Shouldn't the change in balance of Sim101 be USD 1.50 (not 1.00), to account for BTCGBP being denominated in GBP?

Thanks.

[NinjaTrader_ShawnB]

Hello jeronymite,

Thank you for your post.

The balances should be the same, this is because your account is in USD. Executions on currency pairs that do not contain USD will try to grab a conversion rate in real-time shown in the "Rate" column of the Executions tab from your data provider. Should a suitable USD conversion rate not be available, a rate of 1 will be used. This Rate will be used in determining the PnL in USD for the forex trade in other areas like the Account Performance tabs. The approach NinjaTrader follows is the GAIN Capital approach, but may differ from what banks do since they base their conversion rates off of the prior session's closing price of the currency pair. This means that our calculation approach may result in slightly different PnL values than the ones reported from your brokerage.


Please do not hesitate to contact us for any other NinjaTrader inquiries you may have.

[jeronymite]

Hi Shawn,

This really isn't appropriate. With that approach in the scenarios above, Scenario 2 would result in a change of account balance that is out by 50%, a very non-trivial difference.

My understanding is that NinjaTrader uses its own data feeds to ensure an appropriate rate is always available and independent of any price or order connections the trader is using. This makes sense, since many traders may not have any Forex connection.

If we take another example, using a rate of 1.0 would be demonstrably ridiculous in a USD account trading Nikkei Future instruments (e.g. N225, NKY) denominated in JPY. The conversion rate (USDJPY) would be approximately 100.0 (or the inverse, 0.01). That makes the error using 1.0 to be of the order of 100 times (10,000%). The rates must be available from NinjaTrader's own data, or else trading balances where the rate is not available in a trader's connections becomes potentially meaningless. And for many traders, those rates will not be in their connections.

Grateful for re-evaluation of the issue.

Thanks.

[NinjaTrader_Heath]

Hello jeronymite,

Thank you for your post.

For trades in currencies that do not match your account currency, NinjaTrader will attempt to convert currency for forex and futures trades.

• Forex trades will be made for any currency pair that has a cross rate and that cross rate data is available on your data feed.
• Futures trades we use the CME FX futures (6A, 6B, 6E, etc) to make the conversion as long as you have access to that data from your data feed provider.

It's important to note that this conversion and calculation is dependent on the data feeds you are connected to and the cross rate they provide at the time the conversion is made. NinjaTrader does not natively provide data for this. It does not natively assume a rate of 1.0.

This information is also available at the bottom of the linked section of our help guide below:

• https://ninjatrader.com/support/help...TheAccountsTab

Please let us know if you have any additional questions.

[jeronymite]

Thanks, Heath.

Some further questions, if I may:

• Does this mean that conversions are not attempted for Cryptocurrency transactions?
• Are conversions attempted for Stock, CFD or Index transactions?
• Does NinjaTrader use its own internal datafeeds for any conversions, notably if rates are not available from the trader's own data feeds?

Thanks.

[NinjaTrader_ShawnB]

Hello jeronymite,

Thank you for your post.

• Does this mean that conversions are not attempted for Cryptocurrency transactions?

Conversions are attempted for Cryptocurrency transactions. You can see the conversion rate in the Rate column of the Executions Tab after a trade.

• Are conversions attempted for Stock, CFD or Index transactions?

Yes. You can also see these conversion rates in the Rate column of the Executions Tab.

• Does NinjaTrader use its own internal datafeeds for any conversions, notably if rates are not available from the trader's own data feeds?

NinjaTrader doesn't have its own internal datafeed. All data comes from the connection you are connected to.

[jeronymite]

Thanks, Shawn. Appreciate the clarifications.