New to Forex - A Few Questions about Fundamentals

Beginner Questions
1

Hello all,

I am new to Forex. Education is coming along beautifully thanks to babypips.

So help me understand a couple concepts.

  1. I go long on EUR/USD at 1.5050 thus I want to see the Euro strengthen and 1.5050 to rise. If I were to go long however on say USD/CHF at 1.2000, I would want the USD to strengthen and see 1.2000 rise…correct?Am I correct in my thinking that I ALWAYS want the exchange rate to increase?
    On the other hand my thinking is that if I buy 100,000 units of the CHF with USD and the dollar gets stronger, doesn’t that make the CHF I just bought worth less? It seems to me if I bought the CHF I would want 1.2000 to lower, appreciating the Franc vs the Dollar. Then I sell these new Francs for USD and make a profit?

  2. How is it that when I go long on what is an amazing opportunity…there will always be a seller? Is this because there are so many traders with different strategies that there are trades gone wrong and someone is dying to get rid of their bad trade? Due to such a large market…there is just always going to be the opposite of whatever trade you want?

Thanks Forexers.

2

Well yea. The market is so big that we don’t really matter. The other side of your buy could be a large bank trying to accumulate a short position for a sizable move in the market short. You could still get your 100 or so pips but the bank can and will push the market around. They can’t simply put in a huge order, they need to do that in stages.

3

You could be buying where someone else is taking profit.
In general market makers which are mostly banks will always offer a bid and ask, they will always buy their base currency or sell it.
What the price will be at a given time is what we are speculating on.

Cheers

4

Thanks! What about the first question tho? Was more confused about that one.