mardi 23 décembre 2014

taking position with "3rd" currency

Hello, first I'm glad there is a forum where new members don't have to wait for admin approval (silly).



Here is one thing I do not understand yet and need your help:

I'm doing a test with demo account which is now at 10'000 € account balance.

I want to buy dollars vs. yen. that is USD/JPY pair.



according to some logic in order to buy dollars (USD/JPY) I need yen right? so upon taking long position to buy USD/JPY my account balance which is in euros will be charged to buy yen first then those yens will be used to buy dollars? Is that correct?



OR, is my Euro acc. balance charged directly to buy dollars without purchasing yen first?

which one of these two statements is true?



I asking this because if 1st statement is true then that means upon taking the position and exiting the same position it takes 4 currency conversion which makes a good profit for broker :D



Thank you!




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