The simplest explanation
The simplest way to classify long trades and short is by saying that in any trading, be in a long position from where you will achieve profits in the event of increased trading relative to their values and in a short trading terms that you will win if it fell relative worth.
For example, say you have purchased shares of AB c firm in US dollars. You can say now that you are in a state of "long" on the shares of this company in US dollars, and the reason is that you are to achieve the quarter, the value of the company's shares should rise against the US dollar, or vice versa, that the US dollar depreciates against the company's stock a b c .
It must be noted that in the trading and you are short on the status of the currency against the intangible asset, you will often refer to as "long" trading, and at least you're in the "short" trading on the exchange. We'll talk more about this later.
The other way to understand the difference between long and short trades is that you said you where you want to trade in the high price on the chart, you are in a long position on that performance. If you want to drop the price on the graph, you will in a short position.
So, what is the situation "short" in the real trading?
Short trading
Since the time of agreement "Bretton Woods" after the end of World War II, just until 1971, the US dollar shall be set at 35% for each ounce of gold, and so the US dollar price was the same as the price of gold. The majority of the major economic powers agreed to install their currencies to the value of a dollar coin values. In 1971, the United States began a series of lowering the US dollar against the price of gold, before they eventually give up on the correlation between the dollar and gold operations in 1976.
For this reason, there was little trading in the Forex before the seventies. Speculators, traders focused instead on stocks and commodities. Traders could realize profits through the purchase of shares and bonds cheaply and to sell it at a higher price. But, as traders wanted to find a way to make a profit when they thought that prices are about to drop, but they did not actually possess any stock or commodity for sale, way positivism "short" began to emerge.
Traders take a short position on the stock and commodity goods through borrowing or stock and then sell them, before re-purchased later hoping to get the lowest rates. Stock commodities or when he might be returned to the lender, and the realized gain is the difference between the original sale price and the selling price when the repurchase. It must be pointed out that the sellers of short positions will have them pay interest on any money Aguetradwnh the beginning, which was required to buy the stock of goods that will be sold or.
So, the situation short is very different from the long position, and it is worth noting that the stock Goods and - but the stock is Special-tend to have a "long tendencies," which means that the values likely to rise for a long time more than a landing. Decline in stock markets or "bear markets" as they are called often, they tend to be faster and more volatile than high "or emerging markets and the markets." It is said that this is particularly true because of the fact that you said you sell the stock that you have to borrow money to buy them, you are most likely to befall you in the event of panic trading move rapidly against you, which in the event that you own a stock that falls in price.
Forex trading long and short
In Forks, different things, because you said you are trading at a "long" or "short" you are always in a long position on the currency and short the other currency. If you buy, or taken a long position on EUR / USD for example, you are buying euro and the US dollar. You are in a long position on the euro and short on the US dollar. If you sell, or taken a short position, you are in a long position on the US dollar and short on the euro. It at the same end.
The only important factor on long and short positions in Forex trading is any benefit you may need to pay for the Forex broker that juncture retained until the second morning, or alternatively you received from your broker. This account is the difference statement Madlaat interest at which banks lend these currencies to each other, or at least in theory. Unfortunately, the Forex brokers sometimes using this as a way to achieve a sly more money from their clients.
For example, say you taken a long position on EUR / USD. It will, at least in theory, to buy euro and the US dollar. If rates were between banks for USD higher than that of the euro, it has been the mediator to pay some money to you every time kept by this position during the period of the extension of New York (any day). The reason is that you get the benefit of the US dollar rates are greater than the interest rates that you get from the euro, and in theory, positivism square in every extension of New York. On the other hand, if the interest rate on the currency that you have for a long position is less than the rate for the currency that you have the short position, it will be the imposition of certain fees you and which represents the difference in every day is where to keep the position open.
Short trading stock
It is important to remember that if the mediator to provide trading individual stocks, commodities, and / or stock indices, you can do short trades and