How to buy USD and sell EUR in FOREX, while the account is in USD?!!? -

If USD is going up against EUR, then you choose to Sell EUR -- Buy USD... How this is possible while your account is in USD?!!! How can you buy USD with USD or Sell EUR while all you have is in USD?!!! Please clarify to me as I don t want to enter FOREX before understanding it properly... Thanks You don t have USD100,000 nor EUR 64,900. It s magic happening inside your dealer s computers. Think of it this way. You re not buying or selling anything. The dealer is. The dealer sells EUR64,900 from his bank euro account and gets USD100,000 which he holds in his bank dollar account and doesn t put in your account. He is doing this on your behalf, so you are responsible for and losses and get and profits. The money in your account stays put and is the insurance for the dealer that you can cover the losses. Lets say you order the dealer to unwind the position. He sells the USD100,000 that he has been holding and gets EUR65,670. That s EUR770 more than you were short, so that s your profit. NOW, here is the only time your account being is USD makes any difference. The dealer converts the EUR770 profit to USD500 and credits your account. If the price had moved the other way, you would have a loss of EUR770 and the dealer would have done the same conversion and charged your account for a USD500 loss. Or you can forget the whole thing and think of it as a bet on which way the EUR/USD rate is going and leave the details to the dealer. If you are really interested in forex trading you might as well check out your options in this site. First, register to get a free Ebook. You must read and learn all you need to learn from the book. Being a beginner, you need to really exhaust all means to learn forex trading. You can even get a Free Demo account so you can practice virtual trading before you get in to the actual business itself. The best part in this site is, if you wish to trade with them, they will provide you a personal Account Service Manager with whom you can talk live via phone, email or chat and is always available to answer all queries and technical questions. He/she will even trade with you until you become familiar with the system and you can then trade on your own. Well if you feel EUR will rise against the USD and you buy EUR/USD its more like converting your USD into EUR. Your Broker will take care of it, you don t have to worry. So if you feel EUR will appreiiate against USD you buy EUR/USD and when you feel it has appreciated enough you sell it. Look at http://www.babypips.com/ Check trading forex online website like http://tradingforexonline.info/ . It pretty much depends on how large is your account. If you talking something in the region of a million USD, you can call private banking in most of the big banks and they will open the facility for you. Generally, forex trading is one of the highest risk in the private banking business. The most simple ways of forex is that you will show them your funds; says you have a million (they actually call it one dollar). Then you open USD account placing the one dollar deposit with them, which they will quote interest rate for you. Then, as you want to do the forex say EUR, they usually will set up a facility or creditline for you. Usually, it s ten times the amount you have (but it could be five for the beginning period). They will then open another EUR account for you. For one US then, you get 10 US line to play with. You can; After placing 1 US, borrow 10 US and convert to EUR and place deposit with them in EUR, using you initial 1 US as collacteral. What you gain is the interest earning from 1 US, and 10 US equivalent in EUR interest. What you pay for is the loan of 10 US on the lending rates (which is generally higher than depositing rates). Now, they will revisit your account every two weeks time. If the EUR is stronger during the period you gain money, but if it s weaker and you re holding EUR against US, they will force you to sell the weakening amount against your deposit (that is if you buy the whole 10 US converting to EUR). Now, you can call them anytime and square yourself out if you think you already make enough profit, or what to cut down on you losses in case the rates change either way. If you re talking on the amount of less then 10,000, you might as well go to the money changer and convert you banknote to EUR. Some people do that, but the exchange rate gap is quite large, and besides you re risking fake notes if you re not expert on detecting notes. (Safe side you could be converting with Banks, but the rates aren t competitive with money changer.) I m in forex and money transfer for ten years and I think this is highest risk possible in investments. But, if you have large amount without any engagement and can hold funds in any currency for a lenghty period, it might worth a try. My suggestion is don t do it more than your original funds, otherwise you may lose them all. Good luck.