Base 4: Speculation

Buy or Go Long

Speculation consists of predicting the value of a course.

In Forex, we speculate on the value of one currency over another.

If I believe that the value of the GBP will increase against the USD,

I am going to open a PURCHASE position on GBP / USD.

Short Sell or Go Short

Short selling involves taking a SELL position on a security.

Note that we are not talking about selling a bought position,

but to take a POSITION of SALE; which is different.

See this as follows:

You borrow from the Broker to sell now at a high price

then you repay what you borrowed when the price went down.

As you sold at a higher price and then bought back later at a lower price

you have made a profit.

Let's resume

 

Open a BUY position and then RESELL to close it:

If I believe that the value of the GBP will increase against the USD,

I am going to open a PURCHASE position on GBP / USD.

When the value of GBP has increased, I will RESELL it to close it.

Open a SALES position and then REDEEM it to close it:

If, on the contrary, I think the GBP will go down against the USD,

I will take a SELL position on the GBP / USD.

When the value of GBP has decreased, I will REACH it to close it.

© 2016, 2017, 2018, 2019 Club SPN inc.

La négociation de titres implique un risque élevé et ne convient pas à tous les investisseurs. L’effet de levier peut opérer en votre faveur aussi bien que contre vous. Considérez attentivement vos objectifs d’investissement, votre niveau d’expérience et votre appétit du risque. 

Trading in securities involves a high risk and is not suitable for all investors. Leverage can work in your favor as well as against you. Carefully consider your investment goals, level of experience and risk appetite.

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