QUOTE(FLampard @ Nov 22 2012, 07:28 AM)
hey guys newbie to forex here...i got a demo account on etoro with 10 k USD inside. i executed an open trade of BUY JPY/USD
but i dun have JPY in my demo account, how can the order be executed?
whats the diff between market order and open trade?
Hi Flampard,
The way forex works is that when you exchange one currency for another, for example USD for JPY, you always sell one currency and buy anotherl. If you buy JPY/USD, you are buying JPY and selling USD, with the intention of selling JPY back for USD in the interest of making a profit when the price of the JPY currency goes up. You can also choose to sell JPY for USD, in the interest of buying it back when the price of the JPY currency goes down, thus making a profit as well.
When you exchange JPY for USD, or USD for JPY, you don't need to have both currencies in your account, just the USD currency will do since you're trading it for the other one. Even when you're trading non USD based pairs, such as GBP/JPY for example, the currency rates are calculated in their relation to the USD, which is why they're called "cross currency pairs".
You can learn more about the basics of forex trading by reading our free trading guides:
http://www.etoro.com/education/Hope this helps!
Andy, eToro Team