Let's start with a difference basic investment in stock exchange and foreign exchange (FOREX) trading. Single bag is possible ganra money when the shares rise in price.In FOREX (FX) it is possible to earn money so if a currency rises as if low, here is where the concept of putting long or short with respect to a value.
Does it mean to have a position 'long' or 'short'?
A long position is one in which a trader buys a currency at a certain price, and expects to sell them later at a higher price. In this case, the investor benefits from an increase in the price of the market. The concept of a long position is very easy to understand, since we are accustomed to it bag or any type of business, see the fruit bowl that buy oranges to then sell them more faces and obtain a benefit.
Take a short position is a concept perhaps difficult to understand, I will try to explain it in a simple way.
In short, what happens is that you start with a sale so your position is read position- 300. And if you sold short to 10 dollars the action, what you expect is to lower theprice to buy them back or "Buy to cover" is the word, and you win if you buy them cheaper. It is as if you ask lent 10 oranges to a friend and you know that you can sellto your neighbor to 20 dollars. Sell the oranges to your neighbor to 20 dollars, andpurchases in the market by 18 dollars to return them to your friend and you got 2 dollars for the movement.
Long positions are the most used when this bullish market, i.e., the value has tendency to rise in price. Short positions are used to operate when the market is bearish, so in foreign exchange (FOREX) market, it is possible to make money in both situations.
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