Is each currency tracked by its own?

Hi, I have a newbie question.

I’m trying to find the answer by my own using MetaTrader 4 (demo account) but it says “Market is closed”. :S

My question is, lets say I have an account with a balance of 5 million USD, and I see USD/EUR = 1.4 and I think it will go lower, so my plan is to buy USD and sell EUR.

Could I do it? How would it be done, since I have no EUR to sell? (5 million USD, 0 EUR)

Thank you in advance :slight_smile:

If the rate is 1.4 and you think it will go down, you BUY EUR and SELL USD. So I’d advice to place and SELL order, not a buy. :wink:

You are not actually buying or selling anything. You are simply betting on whether the exchange rate will rise or fall.

There are only two conversions that actually take place.

The first is if you’re trading a non-USD based pair (for example, EUR/USD or AUD/JPY) then when your margin requirement is calculate it is done by first converting the trade’s notional amount (your lot size) from the base currency to your account currency (USD).

The other time is when you are trading a pair where USD is not the quote currency (e.g. USD/JPY, EUR/GBP). In that case, your gain or loss is calculated by converting the pip change - which is in the quote currency - into your account currency.