In trading, going ‘short’ a currency simply means betting against its value increasing. This is different from the traditional ‘going long’ strategy, and many of the world’s greatest traders have made their fortunes exploiting currency fluctuations, including infamous trades such as JM Keynes’ short position in the German mark during the 1920s.Learn more : https://www.theinvestorscentre.co.uk/trading/how-to-short-a-currency/
Currencies are notoriously volatile, and can move wildly in price, as was clear following Britain’s decision to leave the EU. This makes them a great choice for those looking to go short, as the price of a currency can be expected to fall if its country’s economy falters and their exports become less attractive.
How to Short a Currency: Forex Short Selling Explained
To make a short bet on a currency, you sell it against another currency and then buy it back at a lower price. The difference between the selling and repurchase price is your profit (or loss, if you are wrong). It is important to remember that every time you go short, you are taking a risk, and you should only ever trade with money you can afford to lose.
The good news is that, unlike with shares, there is no need to follow complex borrowing procedures to short currencies. This is because each forex quote is provided as a two-sided transaction, with the option to ‘sell’ or ‘buy’ a currency pair. All you need to do is choose which currency you want to’sell’ against, for example GBP/USD, click the ‘sell’ button and you are ready to start trading.