Long/short????

[guvvy]

hello everyone.

I am clear on the idea of going long at support then selling at resistance (in very basic terms)

what I am really confused about is the idea of selling as a first point

e.g. EUR/USD is downtrending so we all go short e.g. EUR/USD 1.5 and starts downtrending so if I sell at 1.5, I now have 1.5USD.

so how do I profit from going short??? is it the case that I wait for it drop further then sell USD???

e.g EUR/USD is now 1.0 so I only need to sell 1.0 USD to get the 1 Euro back so I am now. 0.5 USD in profit!?!?

I am of course ignorning the spread etc.

Please help.

[joshipramod]

Dear Guvvy,
Couldn't get your query completely but from what I understood my reply is as follows: -

When you sell / go short on EUR/USD pair - that means you are selling Euro in advance and will buy it back at lower price e.g.

Sold @ 1.2500 and after it down trended bought back @ 1.2400. This means you sold Euros to somebody at higher rate then the rate you bought at. The difference of 100 (2500 - 2400) is your profit. In Long applies vice-a-versa.

Hope this clarifies your doubt.

[guvvy]

Thank you.

I think you got it in one. E.g. I see the downtrend and sell @ 1.25 then buy the eur back cheaper so my profit is the left over usd.

I see you are a newbie too. Perhaps we could share ideas and stuff?s

[Master Tang]

hello everyone.

I am clear on the idea of going long at support then selling at resistance (in very basic terms)

what I am really confused about is the idea of selling as a first point

e.g. EUR/USD is downtrending so we all go short e.g. EUR/USD 1.5 and starts downtrending so if I sell at 1.5, I now have 1.5USD.

so how do I profit from going short??? is it the case that I wait for it drop further then sell USD???

e.g EUR/USD is now 1.0 so I only need to sell 1.0 USD to get the 1 Euro back so I am now. 0.5 USD in profit!?!?

I am of course ignorning the spread etc.

Please help.

In a nutshell, if you're "long", you're long the euro against the dollar, and you want euro value up. If your "short", you're long the dollar against the euro, and you want dollar value up.

[guvvy]

Thank you.

In essence I guess the point is. Go short on a downtrend and exit before the uptrend and vice versa.

[joshipramod]

Thank you.

I think you got it in one. E.g. I see the downtrend and sell @ 1.25 then buy the eur back cheaper so my profit is the left over usd.

I see you are a newbie too. Perhaps we could share ideas and stuff?s

Yes Indeed. I am newbie to Forex Trading. Learning and also currently practicing demo account. You can always feel free to contact me - my skype ID : joshifx

[guvvy]

Hi I dont have Skype can we email?

Also if base currency is gbp and we want to go long or short on a eur/usd trade how does that work? Do we borrow the eur from the broker?

[Master Tang]

Hi I dont have Skype can we email?

Also if base currency is gbp and we want to go long or short on a eur/usd trade how does that work? Do we borrow the eur from the broker?

No.

Technically, your transaction never happens. Spot forex is a bid now, to buy the currency tomorrow. Tomorrow, you will roll over your option until the next day, which is why there are rollover charges for trades held longer than a day.

So, your trade never leaves the pound, but since the value of the EUR/USD has changed since your trade was opened, you pocket the difference, or give the loss to the broker. You never will own euros or dollars.

[guvvy]

Thank you. How does that work on day trading ? So there are no rollovers for day trading? Sorry if I am asking stupid questions

[Master Tang]

Thank you. How does that work on day trading ? So there are no rollovers for day trading? Sorry if I am asking stupid questions

Depends on when your brokers changes days. Say your broker uses GMT as time. If you open a trade at 0:01 AM, and close it at 23:59PM, there's no swap. But if you open it at 23:59PM, and close it at 0:01AM, those two minutes will cost you a rollover rate.