Forex trading is speculation about the future value of the currency. Forex traders can speculate whether the cost of a currency pair can rise or fall.
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In general, when a trader believes that the price will fall, the trader will short a pair of currencies.
4
Payment methods
Trading platforms
Regulated by
Support
Min.Deposit
Leverage max
Currency Pairs
Classification
Mobile App
Min.Deposit
$100
Spread min.
Variables pips
Leverage max
100
Currency Pairs
40
Trading platforms
Funding Methods
Regulated by
FCA
What you can trade
Forex
Indices
Actions
Cryptocurrencies
Raw Materials
Average spread
EUR/GBP
-
EUR/USD
-
EUR/JPY
0.3
EUR/CHF
0.2
GBP/USD
0.0
GBP/JPY
0.1
GBP/CHF
0.3
USD/JPY
0.0
USD/CHF
0.2
CHF/JPY
0.3
Additional Fee
Continuous rate
Variables
Conversión
Variables pips
Regulation
Yes
FCA
No
CYSEC
No
ASIC
No
CFTC
No
NFA
No
BAFIN
No
CMA
No
SCB
No
DFSA
No
CBFSAI
No
BVIFSC
No
FSCA
No
FSA
No
FFAJ
No
ADGM
No
FRSA
71% of retail investor accounts lose money when trading CFDs with this provider.
Min.Deposit
$100
Spread min.
- pips
Leverage max
400
Currency Pairs
50
Trading platforms
Funding Methods
Regulated by
CYSECASICCBFSAIBVIFSCFSCAFSAFFAJADGMFRSA
What you can trade
Forex
Indices
Actions
Cryptocurrencies
Raw Materials
Etfs
Average spread
EUR/GBP
1
EUR/USD
0.9
EUR/JPY
1
EUR/CHF
1
GBP/USD
1
GBP/JPY
1
GBP/CHF
1
USD/JPY
1
USD/CHF
1
CHF/JPY
1
Additional Fee
Continuous rate
-
Conversión
- pips
Regulation
No
FCA
Yes
CYSEC
Yes
ASIC
No
CFTC
No
NFA
No
BAFIN
No
CMA
No
SCB
No
DFSA
Yes
CBFSAI
Yes
BVIFSC
Yes
FSCA
Yes
FSA
Yes
FFAJ
Yes
ADGM
Yes
FRSA
71% of retail investor accounts lose money when trading CFDs with this provider.
Min.Deposit
$10
Spread min.
- pips
Leverage max
10
Currency Pairs
60
Trading platforms
Funding Methods
What you can trade
Forex
Indices
Cryptocurrencies
Average spread
EUR/GBP
1
EUR/USD
1
EUR/JPY
1
EUR/CHF
1
GBP/USD
1
GBP/JPY
1
GBP/CHF
1
USD/JPY
1
USD/CHF
1
CHF/JPY
1
Additional Fee
Continuous rate
-
Conversión
- pips
Regulation
No
FCA
No
CYSEC
No
ASIC
No
CFTC
No
NFA
No
BAFIN
No
CMA
No
SCB
No
DFSA
No
CBFSAI
No
BVIFSC
No
FSCA
No
FSA
No
FFAJ
No
ADGM
No
FRSA
Your capital is at risk.
Min.Deposit
$50
Spread min.
- pips
Leverage max
500
Currency Pairs
40
Trading platforms
Funding Methods
What you can trade
Forex
Indices
Actions
Raw Materials
Average spread
EUR/GBP
-
EUR/USD
-
EUR/JPY
-
EUR/CHF
-
GBP/USD
-
GBP/JPY
-
GBP/CHF
-
USD/JPY
-
USD/CHF
-
CHF/JPY
-
Additional Fee
Continuous rate
-
Conversión
- pips
Regulation
No
FCA
No
CYSEC
No
ASIC
No
CFTC
No
NFA
No
BAFIN
No
CMA
No
SCB
No
DFSA
No
CBFSAI
No
BVIFSC
No
FSCA
No
FSA
No
FFAJ
No
ADGM
No
FRSA
71% of retail investor accounts lose money when trading CFDs with this provider.
When traders short the currency pair, they expect the value of the currency pair to depreciate soon. Short selling is a way to profit from falling market prices.
With all trading CFDs a sample, not all foreign exchange transactions are to buy low and sell high. By selling short, we sell high and then buy low.
It is often difficult for novice traders to master this concept. The most common question is, how does someone sell things you don’t own? In foreign exchange trading, we never hold anything, because trading is purely a guess of future value.
The main points to note when short-selling
- Investors need to be able to judge the overall trend of the market. In the actual transaction process, shorting has strict technical requirements. Since short selling operations only adapt to the fact that the market is declining, investors should recognize the future direction of the market. Otherwise, you will lose too much profit.
- Shorts need to master the rhythm, whether it is the stock market or the futures market. Sometimes market changes will be very sudden, and the short-lived and sloping plunge is also standard. Therefore, investors must use these moments to grasp the rhythm of the operation and to do the work.
- Take advantage of the trend. In the transaction process, the most crucial point is to pay attention to the pattern.
The risk of short selling currencies
The uncertainty of a quick selling mechanism also exists, because when selling short, the investor is not the owner of the stock he sells, and he needs to buy it at the current price when returning.
When the stock price continues to rise, and the trade is light, it is unpredictable when the trade can be completed, or the stop loss expires.
Besides, the short-selling mechanism may also bring adverse effects to the market, which may cause a large number of stocks to sell, leading to market turmoil. At the same time, the short-selling mechanism plays a vital role in the financial market:
- Helps reduce the speculative and volatility of the stock market;
- Helps increase the liquidity of the capital market;
- It helps the price of securities derivatives. Fully reflect the actual price of the securities represented by the derivatives.
Short selling in the foreign exchange market
Trading in the Forex market always involves selling and buying currencies at the same time. Transactions are treated differently than in the stock market where a single stock is purchased or sold.
In the foreign exchange market, these currencies are quoted in pairs. This means that if you try to sell a USD/EUR pair, you will be involved in two simultaneous transactions. If you buy a EUR/USD currency pair, you buy both the Euro and the US Dollar.
Short selling in the foreign exchange market is easy because traders get a two-way quote.
Short sale examples
The short-selling of any foreign currency pair is the same. If you think the currency pair is likely to fall, you can start a short position and take advantage of the price drop.
Example 1:
If you think that the US economy will continue to deteriorate, this is not good for the dollar; you can buy the euro/dollar. This shows that you see more Euros and short Dollars.
On the contrary, you think that the US economy will continue to improve, the US dollar exchange rate will go higher, and the EUR/USD will fall. At this time, you need to enter the market to short the currency pair.
Example 2:
If you think the Swiss franc exchange rate is overvalued, the SNB may enter the market to buy dollars and sell the Swiss franc for intervention, and then you need to buy USD/CHF.
In the same way, if you feel that the US economy is slowing down, or the market demand for hedging is heating up, the Swiss franc as a safe-haven cargo has a safe-haven buying support, then you need to short the USD/CHF.
In conclusion
Short selling is a trading technique used to profit from the downtrend market. Short selling has been used as a hedging mechanism to protect smart currencies from price bearish movements.
Like all trading activities, short selling has its own risks. If the price rises sharply, you may lose all your original investment.