Beginner confused.

[Tai-pan]

When you're buying and selling currency pairs, what are you actually doing? For example:
If I was to sell the CADJPY would I be expecting the CAD to decrease in value, and be expecting the JPY to increase in value?
Then if I was to buy the EURCAD would I be expecting the EUR to increase whilst the CAD to fall?
So, therefore placing these 2 trades would be pointless!

Hopefully, someone will be able to explain this to me if I have got it all wrong...thank you for your time and response.

 

[tomorton]

Basically right.

But few pairs have inverses that can be traded - EUR/GBP and GBP/EUR is the only one I can think of. Selling EUR/GBP is the same as buying GBP/EUR. CAD/JPY and EUR/CAD are not an exact match.

 

[gerryg]

When you're buying and selling currency pairs, what are you actually doing? For example:
If I was to sell the CADJPY would I be expecting the CAD to decrease in value, and be expecting the JPY to increase in value?
Then if I was to buy the EURCAD would I be expecting the EUR to increase whilst the CAD to fall?
So, therefore placing these 2 trades would be pointless!

Hopefully, someone will be able to explain this to me if I have got it all wrong...thank you for your time and response.

Well not always.
For example take CAD can rise against JPY but not strong enough to rise against US Dollar. So you can place Buy CAD/JPY and sell on CAD/USD.
You can check myfxbook average correlation between different currencies

 

[Tai-pan]

Great help...thank you both.

 

[SmartGeek]

Great help...thank you both.

As you are a beginner I would like to suggest you that, you need to do a Demo Practice, until you get over with all the aspects of Forex Trading. Trust me it will help a lot.

 

[Tai-pan]

Great advice, will do. I plan to back test my strategy for 100 trades to find out its win/loss ratio first. Then I shall forward test it on a demo account for a few months, to trade in and out of a couple of draw downs...and then throw some money at it. So I reckon I should be live trading by February.

 

[mcrlogitech]

Buying and selling are interrelated to the principle of demand and supply. If more people are buying than selling the price of the asset increases and if more people are selling than buying the price of the asset decreases. Thus the price of the currency continuously changes.

 

[tomorton]

Buying and selling are interrelated to the principle of demand and supply. If more people are buying than selling the price of the asset increases and if more people are selling than buying the price of the asset decreases. Thus the price of the currency continuously changes.

Sage words. And soothing, like listening to the buddha's less smart younger cousin.

 

[progix]

When the market is in bearish stance we can make money by selling short or vice versa..!!