Open Position

What is an open position?

An open position in forex refers to a trade that has been established but not yet closed with an opposing trade. In other words, it represents an active trade that has not yet been offset by an opposing position.

For instance, if a trader buys a certain currency pair, they have opened a long position. This position remains open until the trader decides to close it by selling the same amount of the currency pair. The profit or loss on an open position is not realized until the position is closed.

Example of an open position 

An example of an open position in forex would be a trader buying 100,000 units of EUR/USD at 1.1200. This means the trader is buying 100,000 Euros and selling the equivalent amount in US Dollars at the given exchange rate.

If the trader later sells the 100,000 Euros at a higher exchange rate, they will make a profit.

Conversely, if the exchange rate moves against them, they will incur a loss. This open position will remain in place until the trader decides to close it by selling the 100,000 Euros.

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