Trading Concepts of BUYING & SELLING

Beginner Questions
1

Hi everyone

Just need a better understanding of buying and selling one comes across a platform.

Its really bugging me and I do feel I’m not seeing something properly.

When one

goes long - buying the base currency and selling the counter currency (buy low , sell high)
you want the the rate to decrease

goes short - buying the counter currency and selling the base currency (sell high )
you want the rate to increase

Am I getting it right by any chance?

My apologies in advance if this is really a noob question lol

2

You got it wrong.

Let’s take EURJPY for example,

Screenshot_20170907-125141.png1080×1920 132 KB

This is today’s EURJPY daily chart.
Current price is 130.003. I’m expecting EURJPY to be bearish, so i sell EURJPY at 130.003 .
My target is 129.800
My stop loss is 130.200
Either i lose 20pip or gain 20pip.

130.003 is a Price index of EURJPY.
Basically
base currency EUR value goes down
and value of JPY goes up.

When you short (sell), you want the rate to decrease.

3

Thank you alphahavoc for the explanation .

so sell short - you want the rate to decrease ( you buy counter currency and sell base currency)

buy long - you want the rate to increase ( you buy base currency and sell counter currency)

4

Hi perse15 :slight_smile: you may find useful reading the following topic: How much do units cost? Clint has explained it great but if the abstract point of view is easier for you to understand you can stick with it :wink:

5

really good explanation ! Thanks alot eyedfondue :slight_smile: