Essential

Short Position

Selling an asset with the expectation that its price will fall, allowing you to buy it back cheaper.

Definition

Going short means selling an asset you don't own, expecting its price to decrease. You profit when price falls and lose when it rises. In forex, going short EUR/USD means selling euros and buying dollars.

How It Works

Borrow and sell at current price
Wait for price to fall
Buy back at lower price
Return borrowed asset, keep the difference

Trading Tips

Potential loss is unlimited (price can rise indefinitely)

Used to profit from declining markets

Stop loss above entry to limit upside risk

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