A long position means you’ve bought an asset, expecting its price to rise. You profit when the price increases above your entry price.
How It Works
- Buy at the current ask price
- Price rises
- Sell at the higher bid price
- Profit = Exit price - Entry price
Example
- Buy (go long) EUR/USD at 1.0850
- EUR/USD rises to 1.0950
- Sell to close
- Profit = 100 pips
Long vs. Short
| Long | Short | |
|---|---|---|
| Direction | Buy first, sell later | Sell first, buy later |
| Profits when | Price rises | Price falls |
| Risk | Price falls | Price rises |
| Max loss | 100% (to zero) | Unlimited (theoretically) |
Key Points
- “Going long” = buying
- In forex, you’re always long one currency and short the other
- Long positions can earn swap if interest rate differential is favorable
- Always use stop losses to limit downside risk