A personal story and other options follow...

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Long And Short Positions

A personal story...

When I started trading Forex I was completely naive, Long and Short positions, no problem!

I was Long one Currency pair and decided to also go Long another, here I will highlight two instances... The first time I was Long EURUSD and also went Long GBPUSD. The second time I was Long EURUSD again but this time I also went Long USDCHF.

The first outcome, I lost twice as much as I anticipated as the market turned against me, both EURUSD and GBPUSD dropped to take out my Stop loss.

The second outcome, I made nothing. EURUSD did as I expected and rose and hit my Target, USDCHF fell and took out my Stop loss. At the time I was trading a 1:1 Risk:Reward “Forex strategy”.

I was a little foxed by this and decided to find out what was going on...

After searching for not too long I discovered Currency/Forex correlation. After reading the subject in quite some depth, from then on I realised when trading more than one Currency pair I had to be aware of the implications of taking out a new position in another (be it Long or Short).

You will read more about Currency Correlation later in this guide or you can jump straight to it here

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Forex Order Types

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