Say we take eur/usd at exchange rate 1.1035.
So 1 Euro is worth $1.1035.
Say we use 1 lot which 100,000. My question is: 100,000 of which currency do you buy?
Do we do 100,000 x 1.1035 = $110,350 so we need $110,350 at hand to buy 100,000 euros?
How does it work broker wise? Say I am with IC markets, do we use borrow from them $110,350?
So say the price went to 1.1040. So our 100,000 Euro is worth $110,400.
We then sell our euros back in exchange for dollars and make $50. Is that right?
Also say my deposit currency is in GBP how does this example work broker wise if I am with IC markets?
When you go long EUR/USD it means that the position you open will give you the same benefits as if you had bought EUR by selling USD at the exchange rate of 1.1035. BUT - you are not buying anything, you are placing a bet with your broker that the exchange rate will rise from 1.1035 and go upwards. All you actually possess is the rights involved in the trade - the right to close the position and to receive what you put in at 1.1035 plus the difference up to the new higher price.
It does not matter what currency your account is in. No currency is changing hands. Neither you nor your broker receive any EUR.
Going short is the reverse but at this stage I would suggest you have a lot of reading and learning to do before you actually go long or short on anything. A demo account would be really useful.
What I see on this thread is that you asked a sensible question and got a correct answer with some additional widely accepted advice thrown in for free.
As for the forum generally, as you’ve only made 5 posts perhaps its a little early to reject the whole site? BP is actually really useful. Stick around, ask questions, make contributions: that way we all win.