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Short and Long Positions In Forex

Posted By admin On Tuesday, February 21, 2012 09:57 PM. Under Forex Basics  

While you are a Forex trader your main aim is to benefit from buying and selling currencies as much as possible. These two processes are being done simultaneously so that you will not lose your profits in case of quick changes of the values of the currencies.
Entering a position is the term referred to the initial Forex transactions, regardless of whether you’re buying or selling the currency. This is the starting point for the active trading.
You’re dealing with a long positioning if you are buying a specific currency. This strategy is being used when you are expecting it to raise in value. In this case you will make more profits after selling the same currency afterwards.
Short positioning is when you’re selling a base currency. In this case you might look forward to the depreciation of the value. The main trick here is that you can even sell a currency that you don’t own.


After you’re done with your entering position you need to conclude your decision with closing a position. This means you need to deal with the opposite action, that is to buy/sell the currency. If you’re a starter in the market, then most likely your Forex broker will advise you about the best timing for closing the positions.
As soon as you entered the market with your choice of strategy you’re considered to be in an open position, after the closing option you “go flat”. The time for the trading is not limited: most of the time it takes a few minutes between opening and closing the positions, still some prefer to stick to a specific strategy for a longer period.
This case is ideal for the starters who need some more time to examine the market. You just need to keep in mind that it’s more desired to have a long positioning with some kind of more reliable currency, so that the variation of its value will not influence your initial investment.

Tags: forex basics, forex brokers, forex market, forex positions, forex traders, forex trading, learning forex, long and short positions in forex, long position, online forex, short position
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