Discuss Trading currency pair problems

[lazycalvin]

I have usd account. If i buy usd/jpy with 1 standard lot size, is it that the trading system exchange usd amount from my usd account to amount of jpy first, and then it buy usd/jpy using that jpy amount to buy usd? It involves 2 times exchange, first it convert usd from account to jpy, and convert jpy to usd for buying, anybody know the answer?

 

[compu-forex]

No there is only 1 conversion and that is your profit or loss points in JPY that gets converted to USD.

Most retail products that you trade at a retail FX broker is a CFD - Contract For Differences. So there is no conversion and you don't actually exchange $100 000 into Yen or anything like that. You simply take a bet with the broker on which way the price will move. Looking at the price if you buy USDJPY, and the price moves up X number of pips, you will have made a profit of X times the lotsize. Now the profit may well be in Yen and that is converted to profit in USD, although in reality in something like MT4, the value of 1 pip is quoted in base currency anyway, and the only real conversion would be from base currency to your account currency(if not in USD in this case).