Excerpt from: Forex Training
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| March 24, 2008 | | Shorting currency pairs on the FX market | One of the advantages of forex trading is shorting. Shorting is a technique in which you "invest" in the idea that a financial instrument will lose value instead of gain it. This works well in speculative markets, such as the currency market, in which you do not actually "trade" or "own" anything.
In forex trading, you work in currency pairs. They are quoted in terms of the first currency. Therefore, in euro/dollar, if you think that the euro will drop, you will short the pair, expressing your belief that the euro will lose out to the dollar.
| Topic Tags: advantages forex trading, currency market, currency pairs FX market, euro/dollar, forex trading currency pairs, forex trading euro/dollar, forex trading shorting | |
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