June 24, 2017

What are long and short positions in forex trading?

In forex trading jargon ‘long’ position refers to ‘buying position’ in which a forex trader buys currency at lower rate with an intention to sell it at higher rate in coming future. In this position trader takes benefit of rise in currency value. While in ‘short’ position refers to ‘selling position’ in which a trader sells the currency at lower rate owing to the expected decline in its value. In this way he prevents loss during lower prices of traded currencies. In all cases trader takes long position for one currency and short for other.