What does it mean to short foreign exchange?
In the foreign exchange trading and stock trading markets, there are common words long and short.
Long refers to long positions, which can also be called bullish, buying a certain currency, and bullish. Shorting refers to selling positions, or it can be called short, selling a certain currency, and bearish.
It is also called long and short as long and short.
Bulls and bears.
In the stock market, investors who hold stocks are generally called long positions, while investors who do not hold stocks for the time being are called short positions. In this way, people who buy stocks are usually called long, and people who sell stocks are called short.
It refers to the proportion of funds consumed by investors to buy stocks in total funds. When all the funds of an investor have bought stocks, it is called a full position, and if they do not hold any stocks, it is called a short position.
Many flips and somersaults.
The longs feel that the stock price has risen to the peak, so they sell the purchased stocks as soon as possible and become shorts, which is called “long shorts.” Conversely, when the shorts feel that the stock market has fallen, they quickly buy stocks and become longs, called “Many somersaults.”
Bullish and bearish.
News and factors that are good for bulls and can stimulate stock prices are called “bullish.” For example, listed companies have exceeded their profit plans, and the macro economy is operating well. Factors and news that are good for shorts and can cause stock prices to fall are called “bad”. Such as the mismanagement of joint-stock companies, the increase of bank interest rates, the occurrence of natural and man-made disasters affecting the operation of listed companies, etc.
How to make money from short foreign exchange?
Foreign exchange trading is a T+0 trading method, and it is also a two-way transaction in which investors can buy up and buy down. In view of the characteristics of foreign exchange trading, it is indeed possible to make money to buy or sell foreign exchange.
Regardless of whether foreign exchange investors choose to go long or short, the main reason why investors can make money within a certain period of time is mainly because foreign exchange investors have trading opponents. In other words, when you sell if the other party is willing to buy you, and when you buy, if the other party is willing to sell to you, you can make a deal. In a two-way transaction with a clear direction, foreign exchange investors can win.
Let’s take the euro against the US dollar in foreign exchange as an example. Before speculating in foreign exchange, investors need to use technical indicator analysis and fundamental analysis to determine the exchange rate trend of the euro against the US dollar.
If the exchange rate is likely to rise, the U.S. dollar should be exchanged for the Euro. If the exchange rate is 1.0100 at this time, the investor makes a long transaction of 1 lot, that is, $1010. When the price rises to 1.0101, the investor sells the euro against the US dollar and then closes the position. At this time, the investor earns 1 point, which is 10 US dollars.
If the exchange rate drops, then investors can borrow euros from dealers using margin. If the investor finds that the exchange rate is 1.0100 at this time, then the investor also makes a 1 lot sell transaction. Use margin to borrow euros from dealers. When the exchange rate drops to a certain level, investors buy euros and return them to dealers. We make a profit of 1 point and earn 10 dollars.