Profit and loss can be realized by selling currencies that are vulnerable to drop in value against another other major currency. Similarly, buying currencies which have a tendency to rise in the market against any other major currency can enable a trader to again gain profit (loss).
When a trader buys a currency at a particular rate and intends to sell it at a higher rate this is called a ‘long’ position and when he/she sells at a rate and intends to buy when the rate falls is called a ‘short’ position.
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