Guys i have a doubt.Suppose say i live in ,say canada i can trade usd/cad , aud/cad ,eur/cad with cad as quote currency since i have cad currency. But how do they trade currency pairs eur/usd, usd/chf without cad . And why dont many people use forex com brokers as they are ecn ?
And say i dont use leverage more than 1:10 , can i get to choose leverage ? like 1:5 or 1:10 or 1:20?
and i will likely keep my position for 2 days to 1 week.is that good?
REPLY
Depending on broker you can choose your desired leverage. Every broker has minimum and maximum limits of leverage. Yes you can hold your trade as long as you wish. But for overnight holding you will be charged swap fee.
thank you.
do you know answer for first question?
Hi @orionblue.
The question of which currency your account is managed in is only important when you wish to deposit or withdraw funds. If your bank account is in a different currency to your forex broker account you will be hit by exchange charges when you put money in / take money out.
For trading it has no bearing. Recognise that you are not buying or selling currency. You are betting on the movement of the exchange rate between two currencies. So it can easily be two currencies from two entirely different countries to where you are.
isn’t betting only for cfd ? In actual ecn forex brokers ,is it also betting?
I think it is buying an underlying asset.
If you go long EUR/USD, what asset will you own?
It will be Eur right.
Leverage doesn’t increase your position size it increases your ability to open larger positions. It is up to you to take or not to take leverage. Regarding trading trading pairs or currencies which doesn’t match your account currency: you don’t trade currencies in strict sense, no currencies change hands when you open or close positions. You bet on changes in currency exchange rates and there is a counterparty which accepts that bet and trades against you - market maker or CFD dealer.
No, you have not bought (or sold) any currency. You have entered into a contract with an unknown party facilitated by your ECN broker, under the terms of which they agree to pay you money if the EUR/USD exchange rate goes up and you agree to pay them money if it goes down. The amount of money that will change hands is in proportion to the extent of the exchange rate change and the size of the position that you opened.
Either way, its a bet.
I search a lot about it and came to find that the ecn brokers are those who are not cfd’s contract, but actually placing orders through banks.