Need some help with the nitty gritty basics

[Multi]

Hi Everyone.

I do know a bit about trading the currency market but I have some real detailed questions which I am hoping some one here can help me with.

I know most of these questions and related answers are not needed to trade successfully but I need to know the EXACT answers to these questions. Don't ask me why I need to know. I just do.

The questions I am about to ask are in-depth and you can only answer them if you have an in-depth knowledge to the workings of the Forex market yourself.
The problem is, I'm not looking for opinions. I desparately need the facts as to how these things work. If you can give your reasons why the point you are making is indeed a fact, I'd appreciate it.

I hate to sound so commanding. I don't mean to be. But I really do need the EXACT detailed answers to these intricate questions.

If you know the answers, I'd love to hear from you.


Question 1

When you buy a currency against another, are you trading one against another or are you buying one and selling the other?
If you are buying one and selling the other, how can you sell a currency you don't have in your possession? If you're trading one against another, what does that mean?

Question 2

When trading on Margin where if I were to buy one standard lot of a particular currency, this would mean that I would have to put up 1% of the total amount.

Where does the rest of the money come from?
Does the broker lend this money to me?
If this is the case, how can he afford to lend each of his clients $99,000 (e.g) who trade with standard lots?

Just this fact alone tells me that they don't lend you money at all but there must be some other system in place which will allow you to trade without that extra 99% in your trading account. The leverage has to come from somewhere!

Question 3

When I make money by trading, is that money deposited into my account straight away? If so...

Question 4

Why is it the Spot Forex market has a settlement period of 2 days.
(a) Shouldn't a spot transaction have the money put into my trading account straight away? So why 2 days?
(b) I know I can see the results in my trading account straight away but if it's my money, can I go to my brokers office and withdraw that money straight away? If not, why not? Isn't it my money? How does this relate to the 2 day settlement period?
(c) Or is there a delay in handing that money over to me? If there is a delay, why the delay?

Question 5

(a) What is going on to stop me taking delivery of the money I bought or sold?
(b) Why can't I take delivery?
(c) If I took delivery, how would that work when trading on margin?
(d) What would I need to do to take full delivery?


I know these questions seem a bit silly but I really need to know the detailed correct answers for each of these.

Appreciate any help you can give,

MT

 

[Multi]

Thanks for taking the time to reply.

I need to know the exact details and the authoritative answers to these questions so I know I wouldn't be doing something immoral.

Now I know you think that there's nothing immoral in trading but there are several factors which I think may seem to come close for me. What may be immoral to me may not be anywhere near immoral for anyone else so many people reading this may not understand why I would think of these factors as doubtfull.

Once all the doubts are cleared up for me, I can run full steam with trading but I do need to get these off my chest first.

Hope you can help.

MT

PS: Is there such a thing as an authoritative answer to these questions rather than interpretations from various traders?

 

[frugi]

Not that it's any of my business, but are you concerned about usury?

 

[A Dashing Blade]

Not that it's any of my business, but are you concerned about usury?

Or a student with an essay to hand in tomorrow?

 

[Multi]

No, that part has already been dealt with by my broker so thats not my concern.

MT

 

[Multi]

Do you have an authoritative resource you can point me to?

I don't wish to take anyone away from their duties.

MT