First, I’d like to explain what is the meaning of open position. To make money on Forex trading, you should sell at a higher price than you have bought. Therefore, making a profit always implies two transactions; you both buy and sell.
One of the trades will be the initial decision - when certain market conditions imply a further change in the price in the right direction.
When the asset price goes below its all-time high, there is a possibility of its rise in the future.
The second trade will fix your trading result – if the price has changed according to your forecast or has started moving in the opposite direction.
If your forecast was correct, you will record a positive result, i.e., you will take the profit.
If your forecast was wrong, you will record a negative result, which is a loss.
An open position is when you enter a buy or sell trade but haven’t yet received a financial result. If you buy an asset expecting it to increase in value, you have an opened buy position. If you sell a currency pair, expecting it to depreciate, you hold a sell position.
Have you come across such terms as a ‘buy,’ a ‘long,’ or a ‘long position’ relative to open position definition? All these concepts mean a buy trade.
A ‘sell,’ a ‘short,’ or a ‘short position’ means opening a sell position.
You should understand that all those slang words mean a trading operation, not the intention to buy or sell an asset in the future under particular market conditions.
How to enter a forex trade?
Before you decide to enter a Forex trade, I recommend studying the mechanics of the market and at least a couple of trading strategies. Thus, you will understand the basic conditions favorable to enter a trade.
The next step is to determine the entry rules.
There are two of them:
Option 1: you enter by market order. You open a position at the best market price. In terms of psychology, it is more comfortable compared with the pending orders. After you put a market order, you are 100% in the market.
However, it is a drawback. If your forecast is wrong, you will have a loss. You can avoid losing trades by using pending orders.
One of the trades will be the initial decision - when certain market conditions imply a further change in the price in the right direction.
When the asset price goes below its all-time high, there is a possibility of its rise in the future.
The second trade will fix your trading result – if the price has changed according to your forecast or has started moving in the opposite direction.
If your forecast was correct, you will record a positive result, i.e., you will take the profit.
If your forecast was wrong, you will record a negative result, which is a loss.
An open position is when you enter a buy or sell trade but haven’t yet received a financial result. If you buy an asset expecting it to increase in value, you have an opened buy position. If you sell a currency pair, expecting it to depreciate, you hold a sell position.
Have you come across such terms as a ‘buy,’ a ‘long,’ or a ‘long position’ relative to open position definition? All these concepts mean a buy trade.
A ‘sell,’ a ‘short,’ or a ‘short position’ means opening a sell position.
You should understand that all those slang words mean a trading operation, not the intention to buy or sell an asset in the future under particular market conditions.
How to enter a forex trade?
Before you decide to enter a Forex trade, I recommend studying the mechanics of the market and at least a couple of trading strategies. Thus, you will understand the basic conditions favorable to enter a trade.
The next step is to determine the entry rules.
There are two of them:
Option 1: you enter by market order. You open a position at the best market price. In terms of psychology, it is more comfortable compared with the pending orders. After you put a market order, you are 100% in the market.
However, it is a drawback. If your forecast is wrong, you will have a loss. You can avoid losing trades by using pending orders.
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