Forex Long and Short and Currency Trading Charts
In Forex, there are two types of trades, these are:
- Long (buy) - long is if the trend is buy/bullish.
- Short (sell) - short is if the trend is sell/bearish.
Buying/Long and Selling/short
Both terms, refer to things we do when open a trade.
Buying Long= term to use when buying and when opening a trade.
Selling short = term to use when selling and when opening a trade.
Long - Long is another term used to refer to buying, If a trader goes long it means that he buys the currency pair that is heading in an upward trend. When the price is moving in an upward trend the trend is referred to as bullish.
Short - Short is a term used to refer to selling of a currency pair that is going in a downward trend. when the price is going downwards then it is referred to as a bearish trend.
Basically the term, “selling short” can be refer to selling currencies in the foreign exchange markets. Selling short is used to transact a currency that is predicted to depreciate in value compared to another, when this currency is sold then it is the same as not holding value in this currency and holding the same value in the other currency.
If the price is going up we buy, this is referred to as going long Therefore long is just another name for buy. When the market trend is going up it is referred to as a bullish, this is when a buy is placed. A bullish trend is identified by plotting an upward trend line on a chart. The example below shows a long/buy signal .
If the price pair is going down we sell, this is referred to as going short. When the market trend is going down it is referred to as a bearish. The example below shows a downward trend, this is when a short sell is placed. The short/sell is identified by drawing a downward trend line on a chart. The example below shows a short/sell signal .
A Forex chart provides a visual representation of exchange rates (plotted on the y-axis) against time (plotted on the x-axis) for a given currency pair. The movement of prices is plotted on these charts. The chart can be plotted as candlestick charts like the one below or as line charts or bar charts .
The three common types of charts used in FX are:
- Candlestick Charts
- Line charts
- Bar charts
These 3 types are covered in the topic Forex Chart Types.
This is the software that is provided by a broker to help traders make place their transactions. Once you download and installs this software on your computer you can then begin to trade in the Foreign Exchange market . All transactions are executed through this platform. If you want to learn a platform, MetaTrader 4 is a good platform to start with.
To set these orders open MetaTrader 4, open a "chart ", right click on the "chart ", select "New Order ", then select the order either sell or buy as shown below. (Short Cut Keys - Press F9)
Setting Buy Long and Sell Short on MetaTrader 4 Platform