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Trading outside of US and conversion neutralization.


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Trading outside of US and conversion neutralization.

  #1 (permalink)
 loxics 
Calgary, Canada
 
Experience: Intermediate
Platform: Ninja
Trading: Stocks
Posts: 14 since Jan 2012
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I just started learning forex and came across a question which I could not find answer to online.

If I'm trading from Canada with canadian fund, I have to first convert it to USD fund to trade any of the currency pair that requires USD component (even USD/CAD).

Does that mean whenever I exchange back to canadian fund after i close out any pair involving USD, I am effectively trading USD/CAD pair back again?

What I mean is, if I trade and profit from trading USD/CAD pair, and convert it back after that profit is made in USD dollar back to CAD, I am basically made neutral which there is no point of trading certain pair if you live outside of US?

Is that true? Am I missing something?

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  #3 (permalink)
 
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 Cogito ergo sum 
Amsterdam
 
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From my experience, my broker does not change or exchange my base currency when I make a transaction in any specific FX underlying.

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Last Updated on June 24, 2012


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