basic question about the value of pairs traded
Posted: Fri Nov 05, 2004 2:03 pm
I am new to forex (though with decent amount of futures, options and equities experience) and have a basic question.
Say I have an account denominated in usd and I want to trade $10k per pair. Do I need to convert the non usd pairs into usd or does it happen automatically by the broker? Say for example I am trading eur/gbp. Would I say I am buying $10k or would I have to convert it into the euro equiv to that?
A similar question would be how do people position size across pairs with different pip values? If I am still trading $10k per trade should I actually be trading more in pairs like usd/chf which have a lower value than in pairs like eur/gbp which are worth more?
any help or advice on how exactly people look at this would be appreciated. thanks
Say I have an account denominated in usd and I want to trade $10k per pair. Do I need to convert the non usd pairs into usd or does it happen automatically by the broker? Say for example I am trading eur/gbp. Would I say I am buying $10k or would I have to convert it into the euro equiv to that?
A similar question would be how do people position size across pairs with different pip values? If I am still trading $10k per trade should I actually be trading more in pairs like usd/chf which have a lower value than in pairs like eur/gbp which are worth more?
any help or advice on how exactly people look at this would be appreciated. thanks