LONG AND SHORT TRADING



The specification of trading most financial instruments on various foundation assets (stocks, commodities. Currencies) is absolutely fundamental fact, that the trading orders may be realized in both directions. It means that you can open your trading positions as buying for speculation, that the prices of selected asset will increase, or you can open a selling position for possible speculation on the price decline of the asset. It is given by the character of the financial instruments, what can be for example commodity futures, options, swaps, certificates or in our case CFDs. By opening the trading position you hedge the trading price parameters of the financial instrument according to its character, without the need to be the owner of this asset.
 
In the case of CFDs you open so called contracts for difference, so that you can open your position in whatever direction (sell, buy), only with the obligation to close this position in the future and make the financial settlement. If your presumption about the price development of the selected asset is right, you make profit from your trading position, but if your presumption is wrong; your position can be losing. Interesting information or reality for you can be the fact that most of your open positions can be in temporary loss from the reason of unpredictable price fluctuations, but ob the other hand most of your open positions can be in the same way in profit. It happens particularly if your positions are open in accordance with current trends, which are visible mainly on daily and 60 minutes charts.   

It is your free will with the knowledge of the markets, principles of this trading, actual situation in your trading, risk acceptance and principles of Money management, where and how you place your trading orders Stop, Limit, respectively when and in what situation you close the trade. You should learn to close your trading positions always in profit!
 
The basic concept of honest money making is in buying low and selling high, what is in daily life easily comprehensible and we are used to it. It is normal aim of trading. The idea includes the aim, although the aim don’t have to be always reached, the trader should always have the reason for his or her efforts. When trading futures there is the aim to make profits from the price movements. We repeat: from price movement. It is not always possible to reach this aim, but always it remains the aim. Online trading of financial instruments CFDs and Firex enables active speculations on the increase or decline of assets prices. It is the only one business in the world, where you can your asset firstly sell  and than buy, without its owning.

Long Trading

In the gobbledygook familiarly used in the trading commodity futures some terms become natural during the time, for example long. If the trader buys the contract it is said, that the trader goes long and opens a long position. Going long in the financial contracts means that the trader thinks the price will increase and he is willing to bet on it by buying the contract. Long position can sometimes be called bullish position. It is the same approach as at the stock exchange, where investor is bullish on stocks of some company, because he or she thinks, or hopes, or prays for price increase of this stock.
 
We are buying, if we suppose, the price of the asset will increase. Increasing prices on the charts are good opportunity for profitable speculation. The increasing price trend is called bulltrend, uptrend, and long situation. Buying the contract is bullish. Both means going long, be long, have a long position. Long is bullish, bullish is buying; buying is expecting the price increase. All usage of the word long reflects the interest on the price increase. If the price increases, the trading plan of the trader in long position is to sell for higher price and thus make the profit. Constant trading objective is easy: buy low, sell high.

Ukázka long obchodu na DJIA

Short Trading

The opposite of going long is going short. If the trader is short, he or she thinks, that the contract price will decline. Short position means owning the contracts, which have been sold in the presumption of lower prices in the near-by future. The trader expects to buy contracts later on lower prices and thus makes a profit. Trader is short, if he firstly sells the contract. 

We are selling, if we suppose, the price of the asset will decline. Declining prices on the charts are good opportunity. The trend of declining price is called beartrend, downtrend, down situation. If the traders have the opinion that prices move to the south they are bearish and go short or open the short position. It all means firstly sell all contracts. And is somebody asks, what is their position eith particular asset, they can answer they are short on market. Short is equivalent to bearish. The principle is same: buy low, sell high, but the other way round.  

Ukázka short obchodu na DJIA


   

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