What is ‘going long’ in forex?
‘Going long’ in forex refers to buying a currency pair with the expectation that its value will increase. When an investor goes long, they are essentially betting that the base currency will appreciate in relation to the quote currency. This strategy involves purchasing the base currency and selling the quote currency.
The goal is to sell the pair at a higher price in the future, thus profiting from the price difference. ‘Going long’ is a common strategy used by forex traders to capitalize on upward market movements.
Example of ‘going long’ in forex
In case you believe that the value of the Euro will rise against the US Dollar, you can go long by buying Euros with Dollars. If the Euro does increase in value, you can sell it later for a profit.
However, if the Euro decreases in value, you would experience a loss. It’s important to conduct thorough research and analysis before making any forex trades and to use risk management tools to minimize potential losses.