currency listing question, couple of

[pippy123]

is EUR/USD ever listed as USD/EUR or is USD/JPY listed as JPY/USD, etc. I know you are buying one and selling the other so either way it's the same, right?
So I am I thinking right when i say, in the EUR/USD example -if you want to buy USD you actually short the Euro???

This also brings up my other question:
Let's say we are looking at a EUR/USD candlestick chart. When you're looking at this chart and the last candlestick, let's say closed lower than it opened (so it's filled in if that matters), this is referring to the base currency's price?? In other words, the EUR went down compared to the USD.

-confused a bit

[honeb]

Originally Posted by pippy123

is EUR/USD ever listed as USD/EUR or is USD/JPY listed as JPY/USD, etc. I know you are buying one and selling the other so either way it's the same, right?
So I am I thinking right when i say, in the EUR/USD example -if you want to buy USD you actually short the Euro???

This also brings up my other question:
Let's say we are looking at a EUR/USD candlestick chart. When you're looking at this chart and the last candlestick, let's say closed lower than it opened (so it's filled in if that matters), this is referring to the base currency's price?? In other words, the EUR went down compared to the USD.

-confused a bit

ive never seen the currency paire listed USD/EUR unless its a type. i dont quite understand why the pair is listed EUR/USD instead of USD/EUR. i but i dont think its very important. which ever position you choose (buy/sell) you are pretty much doing the same thing but coming from different directions.
you are right about the trading of currency. if you are buying Euro then you are also selling USD. how you make money in the forex is that you buy low and sell high or sell and buy it back low. you buy EURO, hold it then sell it to get back your USD. if you think the market is going down then you are actually buying USD, hold it and then selling it for EURO. http://www.babypips.com/school/how_y...ing_forex.html

as for your last question about candlesticks.well, EUR is the base currency so its compared to 1 and the USD is the quote. for X.XXXX amount of USD you get 1 EUR. as the price of USD rises to get 1 EUR it means that EUR currency is stregthening against the USD. so when you see a green or postive candle on a EUR/USD chart then what you are seeing is the EURO currency is increasing in value compared to the USD (which is going down).

[rhodytrader]

In forex trading the pair quotes are fixed as they are (EUR/USD, USD/JPY) and you will never hear the referred to by any real participant or market watcher the other way around. It's just the accepted nomenclature.

As to why the EUR is listed first, that was a decision made by the international banking community when the Euro was launched. If you look through the pairs listing you will see that there is a ranking structure which goes like this for the majors:

1) EUR
2) GBP
3) AUD
4) USD
5) CHF
6) CAD
7) JPY

The currency ranked higher will always be the base in the pair, which is why GBP, for example, is always the base against all other currencies except the EUR, and why JPY is always the quote currency.

[pippy123]

Thx, all that helps. I need to understand some of this less important stuff too. It helps.

Something else though…just to make sure I have this right….

Let's say you’re looking at at chart for EUR/USD:

If you buy the USD….and you’re watching the chart…you want the trend line or the direction of the line/bars to go downward-not upwards??

[ramrocket]

Originally Posted by pippy123

Thx, all that helps. I need to understand some of this less important stuff too. It helps.

Something else though…just to make sure I have this right….

Let's say you’re looking at at chart for EUR/USD:

If you buy the USD….and you’re watching the chart…you want the trend line or the direction of the line/bars to go downward-not upwards??

If you are trading EUR/USD pair you cannot buy USD. You are always buying or long the base currency ---you want the bars/candles to go up.

Same thing when you sell. You are selling or shorting the base currency --and you want the bars/candles to go downward. Think base currency.

[honeb]

yeah, when you look at the chart the candle stick rep the base and the base is moving against the quote. so if in candle stick goes down Euro is down and vice versa.

[pippy123]

but i thought when you sell or short the Euro (in EUR/USD pair), you ARE essentially buying the USD, no?

[rhodytrader]

Maybe this will help.

Here's what's going on behind the scenes when you make a trade in EUR/USD. Let's assume we're buying 100,000 at 1.30 and that we're dealing with a USD based account.

Step 1: Borrow 130,000 USD (100,000 x 1.30)
- Pay the Overnight USD interest rate
Step 2: Convert to 100,000 EUR
Step 3: Deposit EUR
- Earn the Overnight EUR interest rate

When the trade is done, you reverse the process - withdraw the EUR desposit, convert the currency back to USD, repay the USD loan, and what's left is the profit.

Now let's use the same assumptions for a short position.

Step 1: Borrow 100,000 EUR
- Pay the Overnight EUR interest rate
Step 2: Convert to 130,000 USD (100,000 x 1.30)
Step 3: Deposit USD
- Earn the Overnight USD interest rate

When one is long EUR/USD one is holding EUR with an open liability in USD. Profit is made by the appreciation in the value of the EUR vs the USD, meaning EUR/USD rises.

When one is short EUR/USD one is holding USD with an open liability in EUR. Profit is made by the appreciation in the value of the USD vs the EUR, meaning EUR/USD falls.

[pippy123]

this sort of help thx