Strategies for successful trading decisions – going short or long

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The Forex market is quickly becoming the focus of attention for millions of new entrants due to its unique advantages. Many people have learnt how to make clever investment choices in order to take advantage of the market. Two strategies in Forex are going short or going long. Once you understand these two strategies you will be able to make important decisions in order to be profitable. The two main strategies will be examined below.

Going short

This trading strategy is when the base currency is sold in order to buy it later when the price begins to fall.

For example, if the current GBP/USD is 1.5345 meaning we pay 1.5345 Dollars for one Pound Sterling, and we have $1000 dollars, we would sell the Dollars in order to purchase the Pound Sterling. This is carried out when the cost is expected to fall again in a short period of time.

When the price GBP/USD falls to 1.5350, this means that more Dollars can be purchased with the same amount of Pounds that were obtained at the start. The additional dollars can be kept as profit which was earned by considering the dollar as the base currency.


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