Going Long vs Short
Going long means buying an asset in the expectation that its price will rise; going short means selling an asset you do not own (borrowing it first) in the expectation that its price will fall.
A long position profits when the asset price increases. Buying shares, buying a currency pair, or purchasing a futures contract are all long positions. Long positions are the default way most investors interact with markets.
A short position profits when the asset price decreases. To go short, a trader borrows an asset from their broker and sells it on the open market, intending to buy it back later at a lower price and return it. The difference between the sale price and the repurchase price is the profit or loss.
In forex and CFD markets, going short is as straightforward as going long — you simply sell the instrument rather than buy it. There is no need to borrow the underlying asset because CFDs are contracts rather than physical ownership.
Risk profiles differ: a long position has a maximum loss equal to the amount invested (the price cannot go below zero). A short position has theoretically unlimited loss potential because prices can rise without bound.
Successful traders operate without bias toward either direction, analysing the evidence and taking whichever side the opportunity supports. TrustFinance covers both bullish and bearish market analysis across equities, forex, and commodities.
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