Forex Questions

Hey Everyone,

I'm currently reading babypips, and I feel that I have a pretty good grip on the basics (pre-school) but I just wanted to ask a few questions to make sure.

Okay one example given in the basics was GBP/USD = 1.7500. In this example, the GBP is the base currency and the USD is the quote currency. If I feel that the pound is going to gain value in relation to the USD I would sell my USDs for GBPs. Or conversly if I believed that the pound would lose value in relation to the USD I would sell my GBPs for USDs. Now my questions is - does that mean one can only trade pairs that contain his native currency? After all how would I, for instance, trade EUR/GBP when neither are my native currency, and when I don't own any euros or pounds?

thanks,
Cricket

Your native currency has no bearing on what pairs you choose to trade.
Keep studying

Mrgreen,

Thank you for your reply. I do intend to keep studying. I just wanted to know how the market actually works before progressing any further. Can you tell me how I am able to trade pairs of currency that I don't own? Or if that is too much trouble, and an overly repetitive question at least refer me to a website where I can find out. Thanks.

Cricket

It's like deja vu.

http://www.forexfactory.com/showthread.php?t=53557

read the whole thread.

Mr Green,

Thank you for directing me to that thread. :-) I know understand how we are able to sell short.

Cricket