“Unlock the Secrets of Forex: Your Ultimate Glossary Guide that Every Beginner Must Know!”
Short Selling and Going Long
To profit from changes in the value of currency pairs, forex traders typically use short selling and going long as trading strategies.
Short selling is the practice of selling a currency pair at a lower price than the going rate in the belief that the pair’s value will fall. A trader, for example, may elect to short sell the EUR/USD pair if they feel its value will fall. This implies exchanging euros for dollars in the expectation that the dollar will appreciate in value relative to the euro. If the value of the euros falls, the trader can repurchase them at a bargain and profit from the deal.
