The currency effect on a dollar account

The FDAX settles in euros, your account may be in dollars

The FDAX, the FDXM and the FDXS are denominated and settled in euros. Most prop firms, and many brokers, keep accounts in dollars. Between the two there is a conversion, and it happens at three moments the trader does not choose:

1. At every daily settlement. The day's margin variation, in euros, is converted into dollars at the day's rate to be posted to the account. A EUR 500 gain is worth $540 one day and $560 another, depending on euro-dollar.
2. In the drawdown calculation. The drawdown of a dollar funded account is measured in dollars. A EUR 500 stop is not a $500 stop: it is a $540 to $580 stop depending on the rate, and a maximum daily loss rule in dollars translates into euros as an amount that changes every day.
3. At payout. The prop firm pays in dollars (or in its currency), and the European trader converts back into euros. Two conversions, two FX margins, on every euro earned.