Currency cross vs own currency account

Beginner Questions
1

Hi,

Very beginner question: I live in the EU and hence my broker account is to be denominated in EUR.

Now, if I trade any currency vs. EUR it is very clear for me the buy/sell operations.

But if I go for a cross, let’s say, long on GBPUSD, am I not also indirectly trading the EURGBP?

The way I see it is I would be selling my EUR to buy GBP to sell USD. If it works as expected, I would close the position converting back to my EUR, but if the EURGBP went down during the same time frame I might be losing my gains at a given %

Is it like that?

Thanks a lot,
Alvaro

2

When you trade forex as a private retail trader, you are not buying or selling anything. You are entering into a bet with your broker as to whether a particular exchange rate will go up or down. So the relationship you have with them is in the currency of their jurisdiction - EUR.

It doesn’t matter whether you are betting on forex exchange rates or on horse races in Australia, the initial deposit, your profits and your losses are always in EUR.

3

Great, thank you so much, pretty clear now!
Best,
A.