Quote:
Originally Posted by traitor
Can anyone explain to me if it's possible to trade a currency pair when both pairs are foreign? Such as a US citizen trading GBP/JPY. What happens here?
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Yes, this is perfectly possible.
If your trading account is in USD and you go long on the GBP/JPY, you in fact first buy GBP/USD and than buy JPY's with the GBP's you purchased.
When you sell your position, you sell your JPY's back for GBP's and than you sell the GBP's for USD's
Hope this helps.
FXTiger.