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Forex position meaning

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forex position meaning

The main goal of the forex market is gaining profit from your position through buying and selling different currencies. For example, you have bought a currency, and this particular currency rises in value. In this case, you gain profit if you quickly close your position. If you close your position and sell the currency back for fixing your profit, you are in fact buying meaning counter currency in this pair. That is how a rate of worth has been discovered; its one currency value compared to another while operating with currency pairs. In the end, currency of any country has value only compared to another country's currency. The forex position is the netted sum commitment in a particular currency. The position can be flat or square, long or short. We call the position square when there is no exposure, it is long if more currency is being bought than sold, and the position is short if more currency is being sold than bought. The goal of currency trading is exchanging one currency for another. The broker usually expects the market rate or price to change in such a way that the currency he has bought rose in value compared to the one he has sold. Currencies are always defined in pairs in the forex forex and consequently, synchronous buying of one currency and the selling of another follow all trade operations. If you have bought a currency and the value of its price meaning, the broker should sell the currency back if he wants to fix the profit at this level. What's " an open trade or position? In this position, there are two common expressions: What do they mean? It is when you want to purchase the base currency, and are supposed to purchase the currency pair as well. You should own the quote currency before selling. It is sold quickly in the forex market and used to protect your long position on the base currency. There is also the so-called "shorting the market. If you see that the base currency value is getting lower than particular currency or position secondary currency is exceeding the base currency, you should not buy the currency pair; but on the contrary, sell it. Meaning put this in another way, one is said to be position in that very currency when he is buying it. Long positions are within the offer price. In addition, one is said to be "short" in the currency when he is selling it. Short positions are within the bid price, which is in our case 1. The trader is always long in one currency and short in another at the same time because currency operations are symmetrical. Therefore, if one exchanges GBP for USD, he turns out to be short in sterling and long in US dollars. Continued and live and position is called "open. All benefit position loss exist only officially forex influence the margin account. Suppose you want to close your position. In this case you start an identical and opposite trade in the same currency pair. Token required New user. Submit Already have a token? Login with a meaning or Recover token. Already have a token? Your message will be reviewed by our moderator and will be published within 24h. Quotations and spread Cross-rates, pips. Forex Brokers Reviews Forex Charts Forex Rates Bank holidays Codes of forex Currencies' symbols Economic Calendar Technical Indicators Economic indicators FAQ Glossary of terms Trading examples. forex position meaning

2 thoughts on “Forex position meaning”

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