What Does Going Long Or Short Mean?

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What Does Going Long Or Short Mean?

You might be wondering what it means to go long or short in the forex market. It’s not as complex and confusing as you would think, so we’re going to break down both for you!

Going long typically refers to buying a currency with an expectation that its value will rise relative to your purchase price.

Going short is when an investor sells something they don’t own because they believe the item’s worth will decrease over time. Going short can happen even if someone doesn’t actually have possession of a security—then known as selling “naked shorts”. Letting traders sell without owning them is a risky business indeed; but there are some strategies out there that offer protection against downside risk.

Let’s say you went long on gold, what does this mean?

In this scenario the investor believes that gold prices will rise. They buy a position in gold and hold it for an agreed amount of time, hopefully allowing them to cash out before their investment has lost its value.

The price goes higher than what you paid, but then on the way down it becomes cheaper than when you bought it (compared with other currencies). This is called taking a paper loss or being underwater since your initial investment would be worth less now than at purchase time because of depreciation against fiat currency like USD.

Gold can also go above where you initially purchased it from – even if only by cents per ounce – which means that going long was still profitable!

If the price falls below your original cost, however, investors loose the capital.

Now the opposite is true if you went short gold, you would have made money if the price fell.

The important thing about going long or short is to make sure you know what your risk tolerance level is, because it could be costly in either direction.

A lot of traders are interested in taking on more risk for potentially higher rewards by investing in stocks that go up and down quickly, but this can also mean possible bankruptcy. Others prefer a slower pace with less variability, buying bonds as an example – which offer steady returns over time at a fixed interest rate. The key word here again is ‘risk’. You need to understand how much volatility you’re willing and able to take on before committing any capital.”

“Risk means reward,” so some people like the idea of risking their capital, but others fear it in the end.

 

Frustrated Man

Develop a Strategy

No matter what side you take you must understand how the markets move, and what you are willing to risk.

The key word here again is ‘risk’. You need to understand how much volatility you’re willing and able to take on before committing any capital.

“Risk means reward,” so some people like the idea of risking their capital, but others fear it in the end.

No matter what side you take, understanding markets can be a good way for success (or not). There’s no one right way – every market has its own style and nuances that must be understood if trading or investing will work out well.” “You have got to know when to hold em’…and now we all get our chips back.” Everybody needs an edge; this article may help! The author knows something

Earning the Edge

Understanding Forex Markets

The forex markets are a hot topic for many traders and investors. Some people like to think of it as gambling, but I want you to understand that there is more than luck involved in this game. To those who have traded or invested before, they will tell you that understanding how different market styles work can be an edge when trading – no one knows better than me! The best way to get started is by knowing what questions make up “the basics” of forex markets…

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