How to: Go Long/Short

The terms ‘Long’ and ‘Short’ are used instead of buy and sell. Initially, the trader determines if he wants to sell or buy. Let’s assume that the trader wants to buy a currency (buy base and sell quote), he expects a rise in base currency's value so that he can sell it at a price higher than the bought price. This is called taking a "long position" or "going long" in trader's slang.

Now assume that he wants to sell a currency (sell base and buy quote), he expects a fall in base currency's value so that he could buy it later at a price lower than the sold price. This action by the trader is called taking a "short position" or "going short".  

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