Trading Knowledge

Expand the knowledge of trading, improve the level of trade, let you trade confidently, in the series of educational articles provided by Pacific Union.

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Going long or going short is just trader lingo for buying or selling.
As long as you remember LONG = BUY and SHORT = SELL then you’re half way there.
The next bit is a bit trickier…

When to go Long and when to go Short in FX
“Going long” in FX terms is buying the base currency and selling the quote currency. It is what you would do if you thought the base currency was going to rise.

E.g. EUR/USD = 1.1200
If you thought that EUR was going to rise, you would “go long” meaning that you would buy EUR with the hope that you would be able to sell it for a higher price once it has risen.
You go long Euro @ 1.1200
Euro rises in value; EUR/USD = 1.1400
Your Euro is now worth $1.14 instead of $1.12

“Going short” in FX terms is selling the base currency and buying the quote currency. It is what you would do if you thought the base currency was going to fall.

E.g. EUR/USD = 1.1200
If you thought that EUR was going to fall, you would “go short” meaning that you would sell EUR with the hope that you would be able to buy it for a cheaper price once it has fallen.
You go short Euro @ 1.1200
Euro falls in value; EUR/USD = 1.1000
Your Euro is now worth $1.10 instead of $1.12

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