Unlike many markets, forex lets you profit from falling prices as easily as rising ones, because you are always trading one currency against another.
Going long
Going long means buying the base currency expecting the pair to rise. If you buy EUR/USD at 1.0800 and it rises to 1.0850, you profit on the 50-pip move.
Going short
Going short means selling the base currency expecting the pair to fall. Selling EUR/USD at 1.0800 and buying it back at 1.0750 profits on the decline. You're simultaneously long the quote currency — there is always a 'side' you're betting on.
The mindset shift
New traders often have a 'buy' bias from stocks. In forex, down moves are just as tradeable, and pretending you can only profit from rallies cuts half your opportunities — and half your risk awareness — away.
Key takeaways
- Long = buy the base expecting a rise; short = sell expecting a fall.
- Every position is long one currency and short the other.
- Forex profits work in both directions — drop the stock-market buy bias.