How does MetaTrader 5 calculate profit? - page 3
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Take a simpler example - BUY/SELL without any limits. Why complicate the task and confuse it by going inside the spread?
Look at the current prices, consider that transactions are instantaneous and rates do not change.
That is, you refuse to take a simple example of trades and try to take the idea to "put a limit here, catch it there".
Renat, I am apparently not a pleasant person to talk to. You can start a discussion with statements like that.
For my part, I have made quite specific arguments as to why your profit calculation scheme functions on the verge of fraud. You, in an attempt to simplify, have made an obvious blunder. I offered to fix it by changing it to (Bid + Ask) / 2.
People versed in pricing will understand the problem perfectly. Including your potential customers. You need to fix the problem.
The example was purposely taken to show the apparent illogicality of the profit calculation scheme you use, when I sell and buy by myself. The scheme is simple, by the way. And it works fully on the same exchanges. And if you position your platform as an exchange platform, such distortions will occur on the exchange as well.
Unfortunately, you have not shown a clear example with clean calculations of a simple situation. And as soon as you describe it, you will immediately see the problem area of the conversion. And I know that.
About exchanges:
That's really awful, I recommend looking at the RTS for example. Those are their rules, and there are plenty of arguments in their defence. It seems to be the best of the other (bad) options.
Renat, I am apparently not a pleasant person to talk to. You can start a discussion with statements like that.
Absolutely not. Communication is very useful - it gives you a deeper understanding.
For my part, I have made quite specific arguments as to why your profit calculation scheme functions on the verge of fraud. You, in an attempt to simplify, have made an obvious blunder. I offered to fix it by changing it to (Bid + Ask) / 2.
People versed in pricing will understand the problem perfectly. Including your potential customers. Fixing the problem is necessary.
Given that we have spent a fair amount of time in our work sorting out these conversion rules, and working explicitly with specialists from the banks, I can say that the calculation is correct.
Yes, converting profits on cross rates with an example of reciprocal opposite trades will show a loss depending on the spread of the rate used on the conversion.
And this is correct.
Unfortunately, you have not shown a clear example with clean calculations of a simple situation. And as soon as you describe it, you will immediately see the problem area of the conversion. And I know that.
So everything would make sense on a simple example? And you can ignore inconsistencies in a more complicated example? Tell the banks that, touching on the issue of auditing.
If the trading account differs from the currency of the instrument, the exchanges make a fabulous move - "the real profits are recalculated at the end of the trading session at the agreed / posted rate". Now that's a beautiful move, I recommend looking at the RTS for example. Those are their rules.
So with a simple example, everything would make sense? Can you ignore inconsistencies in a more complex example? Tell that to the banks when you raise the issue of auditing.
With a simple example you will see everything yourself and say "yes, that's right".
We discussed this question with the banks, because they are very careful in these matters.
This is the full analogue of the conversion of multi-currency profits to rollover in FOREX. How can similar exchange rules be implemented in MT5? By a crutch like in MT4 - by debiting/charging your account to even out the discrepancy with the real situation?
You are making something up.
For the exchanges, we make solutions which are fully consistent with their requirements - along with the recalculation of cross-rate (where appropriate) profits on deals by the end of the session. Yes, it's terrible, but that's their rule.
With half the price, there will be a constant error in conversions. And no bank will go for that.
So you get a mistake either way. It is just a question of choosing the lesser of two evils.
Yes, converting profits on cross rates with an example of reciprocal opposite trades will show a loss depending on the spread of the rate used on the conversion.
And this is correct.
This is not just wrong, it is not logical: I transfer from one purse to another and lose money.
If we are talking about the real FOREX market, there is no position closing at all until the rollover. Just opposite trades hedge previously opened ones. And the rollover has a closing of positions, something like OrderCloseBy in MT4. At the same time there is a corresponding conversion of profits.
So you've got it both ways wrong. The only question is to choose the lesser of the evils.
We have no error, the conversions correctly account for the meaning of converting loss and profit.
Because in one case you have to buy back the loss at ask and sell the profit at bid to get the result in the target currency.
It's not just wrong, it's not logical: I transfer from one my wallet to another and lose money.
And you think that you have made several trades (which is exactly a few) with internal conversion transactions and have not lost anything? That's just beautiful!
Once again - you live in some other world, where you do not know the costs and where banks conduct operations for free. Judging by statements like "audit, fraudulent scheme, taking money, extra profit, etc.", you really think that the cost of such conversion transactions is zero.
You have to try very hard in your beliefs to deny a broker or bank their legitimate spread from a transaction...
If we talk about the real FOREX market, there are no position closings at all until the rollover. The opposite trades simply hedge the previously opened ones. And the rollover has a closing of positions, something like OrderCloseBy in MT4. At the same time there is a corresponding conversion of profits.
We have no error, the conversions correctly account for the meaning of converting loss and profit.
Exactly right, they do, that's what I wrote about right away. But the only rule is that the conversion is not done here and now, but on the aggregate netting position of all clients at the time of the rollover. And there are no such distortions there because of that.
And you think that you have made several deals (which is exactly several deals) with internal conversions and have not lost anything? That's a beauty!
Please describe by example what kind of internal conversion operations you mean. Let us not confuse the calculation of current margin requirements with conversion operations.
For example, if you have USD, and you decide to trade potatoes with yourself in the above scheme, which is evaluated in GBP, then the margin requirement for trading potatoes will take into account changing GBPUSD rate, but there will not be conversion transactions. And when no one has potatoes, as was the case in the beginning, the amount of both accounts will remain unchanged.