Close Position

‘Close Position’ in forex refers to the act of liquidating or exiting a trade by selling or buying back the same amount of a currency pair that was initially bought or sold.

What does ‘Close Position’ in forex mean?

Closing a position in forex refers to the act of ending or liquidating an existing trade. When a trader closes a position, they are essentially reversing their initial trade. This can be done for several reasons, such as taking profits, cutting losses, or simply exiting the market.

Closing a position involves selling a bought currency pair or buying a sold currency pair. The closing price is the rate at which the trade is completed, and it determines the profit or loss made on the trade.

Example of ‘Close Position’ in forex: 

Let’s say you bought 100,000 units of EUR/USD at 1.2000. This means you are long on the Euro and short on the US Dollar. If the price later moves to 1.2050 and you decide to close the position, you would sell the 100,000 units of EUR/USD back into the market.

This action of selling would close your position, and you would realize any profits or losses based on the difference between the opening and closing prices.

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