Going Long & Short in Forex

Forex trading is a way of investing which involves trading one currency for another.

The main aim of forex trading is to successfully predict if the value of one currency will increase or decrease compared to the other.

So, a trader might buy a currency today, thinking its value will go up tomorrow, and plan to sell it for a profit then. This is known as going long.

Or, they may decide to sell a currency if they think its value will go down and buy it back later when it’s cheaper. This is known as going short.

The value of any currency changes frequently and can be affected by many factors including:

• Interest rates
• Inflation
• Supply and demand
• Political events
• Natural disasters

In forex trading, each currency has its own code to help you identify it more easily.

For example, the code for pound sterling is ‘GBP’ and the code for US dollar is ‘USD’.

Currency code examples

Going Long & Short in Forex

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