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Quick newbie question: What does shorting mean?
over 2 years ago
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First of all, you have to be clear on how to read a currency quote. Currency quotes are always given in pairs, because when you are trading forex, you are always buying one currency while selling the other. Examples of such are USD/JPY, EUR/USD. An example of a rate would be EUR/USD = 1.4000. Remember that the first number is the base currency while the second number is the quote currency. When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. This would mean that it would take 1.400 dollars (USD) to buy one Euro. Always remember that when you are going LONG on a pair, you are expecting the base currency to go up relative to the quote currency. When you are going SHORT, you are selling the base currency, meaning that you are expecting the base currency to depreciate relative to the quote currency. For more information, check out the site I posted below :)
over 2 years ago
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Shorting means borrowing and selling currencies that you do not own. In contrast with going long, you profit in a short trade if the price of a pair gets cheaper. Here, you buy back the currencies that you initially sold at a lower price. You then return these to whom you borrowed them from. The difference in the prices, when you sold them and when you bought them back, is your profit.
over 2 years ago
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Shorting means selling. For example you short trade in EUR/USD; you are selling the base currency (which is EUR) and simultaneously buying the quote currency (which is USD).
over 2 years ago
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