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High Risk Warning: Trading forex carries a high level of risk.

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Long / Short

BeginnerInstruments
Last reviewed on May 3, 2026

Going long means buying a currency pair expecting it to rise; going short means selling it expecting it to fall.

In forex, buying EUR/USD (going long) profits when the euro appreciates against the dollar. Selling EUR/USD (going short) profits when it depreciates. Because currencies are quoted in pairs, every trade is simultaneously long one currency and short another.

Understanding directional bias is the starting point for any trade setup - position sizing and stop placement follow from the direction and the level of conviction.

Worked Example

A trader goes long EUR/USD at 1.0850, buying 0.5 standard lots (EUR 50,000), expecting ECB rate hike signals. The pair rises to 1.0920 - a 70-pip gain. Profit: 70 × $5 (pip value at 0.5 lots) = $350. Later the same trader goes short GBP/USD at 1.2700, selling 0.2 lots on a bearish UK CPI forecast. GBP/USD falls to 1.2640 - a 60-pip gain: 60 × $2 = $120. Each trade expressed a clear directional bias with defined risk per pip.

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Related Terms

Stop LossHedgingLimit OrderLeveragePosition SizingBid / Ask