Going Long
Going long means buying because you expect price to rise.
Example:
Buy EUR/USD at 1.1000.
Price rises to 1.1050.
You close the position.
The favourable price movement contributes to your profit.
Going Short
Going short means selling because you expect price to fall.
Example:
Sell EUR/USD at 1.1000.
Price falls to 1.0950.
You buy back.
The favourable price movement contributes to your profit.
Why Can Traders Sell First?
In many leveraged markets, the trading mechanism allows traders to obtain exposure to falling prices without first owning the underlying asset in the traditional sense.
The exact mechanics depend on the product you’re trading.
Key Takeaways
- Long = looking for price to rise.
- Short = looking for price to fall.
- Traders can potentially profit from both rising and falling markets.
Disclaimer
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
