So where We going now, Long or Short?

currency_exchange.jpgThe value of the open position changes according to the forex market exchange rate. All benefit and loss exist only officially and influence the margin account. Suppose you want to close your position. In this case you start an identical and opposite trade in the same currency pair.

 

So what is “going long” in forex, what does it mean? It’s when you want to purchase currency pair as well. Going long the GBP/USD pair means purchasing the base currency and selling the same sum in the quote currency. You should own the quote currency before selling.

 


There’s also the opposite called “going short”. The same rules are used here as explained above only vice versa. Going short the GBP/USD pair means selling the base currency and buying the same sum of the quote currency at the running exchange rate.

 

The forex trader is always long in one currency and short in another at the same time because currency operations are symmetrical and the pairs are oppositing each others. So if one exchanges 1,000 GBP for USD, he’s turns out to be short in sterling and long in US dollars.

 

 

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