Deposit denominated in USD or JPY?

Beginner Questions
1

Hi,

  1. Initial date:

    In this lesson, we have this information:

“Let’s say you’ve deposited $1,000 in your account and want to go long USD/JPY and want to open 1 mini lot (10,000 units) position.”

  1. Question:

Instead of “1,000 USD”, should it have been “1,000 JPY” ?

I know that if you go into a long USD/JPY position, it means that you buy USD and sell JPY, so how to sell JPY to buy USD, if the deposit is denominated in USD ?

Thanks for your time !

2

To be quite honest I dont know the answer to that question. What I do know, however, is that a lot of what people are attempting to ferret out in this forex trading business is, for the most part, grossly unnecessary. What if I told you that to be successful in trading forex all that is needed is simply to buy when the price is rising and sell when it is falling? And the funny thing is that the strategy works on EVERY single pair or instrument. We humans have a penchant for complicating the simplest of things. But then again what do I know? lol

3

There are currency conversions that happen behind the scenes to make this happen. Going long on USD/JPY means that you are borrowing in JPY in order to purchase in USD. In effect you are hoping that USD goes up so that when you pay back the JPY loan you end up with USD left over which you can pocket. Unless you are doing some interesting calculations I would not worry about it as it makes no difference to what you end up doing when trading anyway.

1 Like
4

Hello again.
I answered your last question regarding margin calculation since I find it really useful.

But I noticed that you have been asking about some technical details that might not be necessary for your current stage in learning Forex trading. While it’s great to be curious and want to learn as much as possible, I suggest focusing on the major lessons and concepts such as margin, hedge, basic analysis, leverage, choosing brokerages, and so on. These are the fundamentals that will give you a strong foundation in trading.

Of course, learning about pip value, margin, and profit calculation is important, but don’t get too caught up in the details just yet. As you continue to learn and practice, you will naturally gain more necessary knowledge and experience.

So my advice is to not stress about the small details and instead focus on the bigger picture. Good luck with your trading journey.

2 Likes