Dear everyone,
I’m sure this might sound very obvious to you, but I’m just trying to learn trading so please excuse me in advance.
If my account is in USD and I want to trade USD/JPY because there is no JPY/USD pair. What am I doing exactly? I’m buying USD with USD? How does that even work since I do not have JPY. Thank you all in advance.
start by going through the Babypips School if you haven’t already. They explain all of this
In USD/JPY, U.S. dollar is the base currency and thus the “basis” for the buy/sell. You either execute a BUY USD/JPY order or you would execute a SELL USD/JPY order. The base currency would be USD.
Thank you so much GMoore. I really appreciate it!
Thank you!
Do realise @amjad2019 that although we might say “buy” in forex trading, you’re not really buying anything. So if you buy EUR/USD as an example, your broker is not going out and buying Euro notes which belong to you.
In the example you are actually placing a bet that the exchange rate between the EUR and the USD will rise. If you are correct, you experience the same benefits of someone who actually owns Euros and has sold dollars to get them - so, as the benefits are the same to the trader as a Euro owner’s benefits the industry uses the term “buying”.
This also means you do not have to worry if you “buy” CHF and sell USD, you do not have to exchange your CHF back into USD at the end of the trade. And if you buy EUR and sell JPY, you would not have to first convert your USD into JPY in order to buy the EUR. We’re just betting.
That explains a lot. Thank you so much Tommar!
Maybe if you want your basic to be set to JPY, you could value yourself within some lecture about short trading;’ short trades. Probably teaches and explains a lot if you want to turn around the variabel on the pairs your working with/on,
*excuse me about, read your post again’ so just a bit of information on above. Your buying the JPY and reselling it at an market enraise. Should be a correct on the post.
No worries bud, we are all here to help each other.