I AM CONFUSED ABOUT THIS - HOW CAN I GET CURRENCY XXX IF I'M TRADING YYY/ZZZ??
This confuses many new traders. When you create an FX account, you will be nominating what the base currency is, this is usually the currency where you live. If you live in the United States you would typically use USD. Live in Canada, CAD. Live in Tokyo, JPY. Live in The EU, EUR and so on. That is the currency that all trades will be paid out in once they are closed.
The pairs that you trade have no bearing on this outcome. It may help to think of it in this way: "I am going long / going short on the asset known as USD/JPY and will be paid out in my base currency." Don't look at the pair you are trading as multiple exchanges, look at it as a single vehicle, this may help you.
Related questions we get often:
I NEED TO EXCHANGE MONEY, HOW DO I DO IT?
This isn’t what this sub is for. Your best bet is to use your bank or online exchange service. Be prepared to pay a hefty fee.
I HAVE MONEY IN ONE CURRENCY, AND NEED TO CHANGE TO A DIFFERENT ONE FOR REASONS, IS NOW A GOOD TIME?
Don’t ask us this. We speculate intraday in FX and shouldn’t be relied on to tell you what’s best for you. Exchange the money when you need it. And, honestly, if we knew whether "this was a good time to do this or not", we would be millionaires, right?
CAN I GET PAID OUT IN A DIFFERENT CURRENCY THAN MY BASE ACCOUNT IS NOMINATED IN? THIS IS FOREX AFTER ALL
Just because we are dealing in foreign exchange, doesn't mean that exchanges are made for you. You will need to talk to your broker, but in general, if you want a payout in a different currency than your base nominated currency, you'll need a different account.
AM I ACTUALLY EXCHANGING CURRENCIES?
Yes and no. Do not overthink this: your account and all transactions will always result in payments/losses in your base currency. That base currency is your home country's currency. Are you American? USD. Canadian? CAD Living in Japan? JPY. Your broker handles spot FX in currency pairs. Although they make an exchange at the settlement date they treat your position in your account as a virtual currency pair. Think of it like a contract where you can only buy or sell it as a pair. In this sense, you are always long one currency while short another. You are merely speculating that one currency will appreciate or depreciate vs another.