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Selling Short And Selling Long In Currency Trading

The difference in trading with stocks and trading with currency is that currency trading is done in pairs like USD with Euro. One important difference...

 

The difference in trading with stocks and trading with currency is that currency trading is done in pairs like USD with Euro. One important difference the concept is long and short.

Long entry in trading equities is basically the method of buying shares in a hope that the value will go up. On the opposite, a short entry is to sell the shares before you own them and then be bought back later on. This method is used if you think the shares will go down in price.
In the Forex market long and short entry is done in a totally different way. Since you are trading with pairs of currencies, for example USD/EUR, you have to do actions on both currencies at the same time. To go long on USD/EUR you need to buy USD and sell EUR. On the other hand, If you want to go short on USD/EUR, you need to sell USD and buy EUR simultaneously. So wether you choose long or short trading, in a currency pair their will always be a short one and a long one in the currencies of the pairs.

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This method might be a bit unknown to traders dealing with stocks or futures. However, what it practically means is that a currency trader is as the same time always bullish on one currency and bearish on another currency.
This is the basic important structures of currency pairs. To understand which strategy to follow in short and long trading you need to study the technical analysis and understand the various impact on the currencies directions. Using the right foreign currency strategy you will have better odds to make the right decision either you want to go short or long.

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