By Sean Hyman As I’ve often said, if you don’t know the foreign-exchange lingo, investing in the foreign-exchange market can be a bit daunting.

For example, many foreign-exchange beginners don’t even understand the brokers’ language when it comes to “shorting” or “going long” on currency pairs.

Here’s my quick explanation: Going long is just trader language for buying a pair. Going short or selling short is when you enter a position with a sell hoping that the pair goes down in value. Then later on you close it out by buying it back (hopefully at a lower price).

You don’t need any special provisions to sell short a currency pair. After all, when you buy a pair, you’re essentially buying the first currency and selling the second one listed in the pair.

For example, if you’re buying the euro vs. the U.S. dollar, EUR/USD pair, then you’re essentially betting the euro will rise against the U.S. dollar. So you’re buying the euro and selling or “shorting” the dollar.
I’ll be back soon with more Forex basics. Until then…

Have a great weekend!

Sean

Sean Hyman, “Professor FX” and Long-Time Currency Analyst Explaining How You Can Succeed in the Currency Markets.
Sean Hyman spends his days teaching his fellow professionals in the industry how to trade the $4 TRILLION currency market. Now he brings his 15 years of financial experience to you. From long-term currency strategies, to quick FX-trading moves usually reserved for the professionals, Sean will tell you everything you need to know to succeed in the currency markets.