How do you trade in Forex? Whether it is short-term or long-term positions, it will be your trading needs that define your characteristics. Trading in Foreign Currencies is profitable if someone invests at the right time at the right position. Forex long position and short position are two ways of trade to make a profit. In this perspective, one can make a trade on different currency pairs with a possibility of earning a considerable profit.
What does Forex long position a short position mean?
In currency trading, long position defines the rise of the value of an asset in the trading market. These gradual increases in the value determine the buy position (long position). In other words, traders who buy at the time of hike in price of an asset are in long position trading. This occurs when supply decreases in relation to demand so these price rises, and it takes a long time to increase.
A short position will be defined as the gradual decreases in the value of an asset in the trading market. In other words, traders who sell at the time of fall in the price of an asset are in short position. This occurs when the supply increases with respect to the demand, so the price falls, and it takes a short time to fall.
More about Forex long positions:
Forex trading has few terms that one should understand correctly otherwise it will be confusing to trade on. Are you getting difficulties to understand positions that where to initiate your trade? Experts in Forex upload different videos from time to time to make things easy for other traders through their experiences of practical strategies. Seminars and discussion will also help a lot in making the things better to understand.
A key component of Forex long position is the expectation of a rise in price when the investors purchase in this currency market. He or she should be considerate about selling in the near future when it is observed there is a fall in the price. In this way, the continuation of Forex trading will be performed with selling and buying process. In this phenomenon, many traders use the strategy of ‘call option’ and earn a profit.
It is defined as an agreement that investors agree to invest in buying at a specified price that will be limited to a specific period. In other words, call option gives the right to an investor or trader to ‘call in’ (buy) an asset. In this process, your profit will be marked when the underlying asset gets an increase in its price, and you initiate a sell position.
For example, one has taken a single ‘call option’ to buy (Forex long position) at $10 until its expiration date 31 December 2016. This means the investor has the right to hold these assets until the expiration date without any loss of money. Shortly it is expected to reach the value up to $15. Within this given period, he or she can sell the contract to make a profit.