What is Short Position?

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A **short position** in trading is the sale of a financial instrument, such as a currency pair in the Foreign Exchange (FX) market, with the expectation that its price will decline, allowing the trader to buy it back later at a lower price to realize a profit. In FX trading, taking a short position on a currency pair like EUR/USD means selling the base currency (EUR) and simultaneously buying the quote currency (USD), anticipating a weakening of the Euro relative to the Dollar.

Short Position

What is Short Position?

What are the specific mechanics of opening and closing a short position in the Foreign Exchange (FX) market?

What are the primary risks and risk management strategies associated with holding a short position in currency trading?

How are short positions strategically utilized in FX arbitrage and hedging operations?

What are the key fundamental and technical indicators for identifying optimal entry points for a short position?

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