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In the currency trading business, you need to come across many new terms. Trading language is different from the common language that we use regularly. For example, a person who buys something, we can call him/her a “Buyer” and a person who sells something we may call him/her a “Seller.” But, in the Forex market, buyers arereferred to as “Bulls,” and sellers are referred to as “Bears.”
Without knowing these four terms, you will not be able to effectively define the opinions of the market. Besides, it will be difficult to communicate with other traders. Therefore, this article will be helpful to understand these four terms applied in the Forex market.
Long vs. Short
As a beginner, it is natural to get confused concerning about these two words. However, if you search for the records mentioned above, will see all the intermediate traders also mixed up these terms frequently.
You intended for a long trade to purchase an asset at a smaller price with the hopes of selling it along with the better value. But, on the other hand, you will intend to sell your asset by more excellent value for the short business.
Long
You can find the different buttons in trading software. It varies. A fewsoftware programs can show the entry button of trading marked as long while the other software programs kept the entry button as a buy. It refers to buying an asset. For example, you are long “XYZ.” That means to own shares of XYZ Inc. and would like to sell those (shares) at a much better price.
Short
You can find the different buttons in trading software. It varies. A few software programs can see the entry button of trading marked as short while others kept the entry button as a sell. It refers to borrow or, Sell the asset as well as short interchangeably. For example, you are short “ABC.” That means you give your shares to ABC Inc. and earn a more significant amount of money. But hope to back those shares at a lower price later on.
Bullish Vs. Bearish
The terms bullish and bearish illustrate the actual situation of the currency exchange market. However, one thing should keep in mind- “in a global currency exchange market like Forex -an attempt to control the prices is not possible, which is not impossible for particular companies occasionally.
Always remember trading, not a child game. You need to learn a lot about options trading online and only then can you take the trades with a great level of confidence.
How to Turn a Profit in Both Situations (Bullish and Bearish)?
Once a person has a clear conception of these terms, it will become easier to stay on top in both situations and navigate them because he will be able to detect the cycle (at what time and exactly how headed for profit) ideally. This can characterize you as a clever trader. Fate and right timing also matter here.
Forex is one kind of CFD (contract for difference) market. In CFD, you can buy the virtual product instead of the actual product. Those characteristics CFD holds have similarities with the Forex market. Characteristics are-
- Products will be simulated.
- The value will not be reliant on quality and condition.
- Leverage can be taken.
A person will be able to finance elevated or low point values according to his desire to be in both situations.
We tried our best to keep these four terms simpler for you. If learned well, they will always play by the side of a market joiner especially in hard situations. Success in FX depends greatly on the knowledge someone possesses. So, having a clear concept is crucial. If required, you can seek help from the top traders. But do not trade with real money unless you are comfortable with your trading actions.