Bought and holding, wanting more:long means you gain if prices soar.
A trade in which a currency pair is purchased with the expectation that it will increase in value.
Profits are realised when the pair is sold at a higher price.
In plain words
A long position is a trade that was opened by buying and is still open. It gains value when the price rises above the purchase price and loses value when the price falls below it.
See it move
Profit or loss: the distance between Exit price and Entry price
Why it matters
On a trading platform a long position is opened at the ask, the higher of the two quoted prices, and closed at the bid, the lower. It therefore starts with a small loss equal to the spread, and the price has to move by that much before the position breaks even.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
A trader opens a long position of one standard lot of GBP/USD at an ask of 1.2002 when the bid is 1.2000, and closes it when the bid is 1.2032.
- 1At the open the position could be closed only at the bid, 1.2000, which is 2 pips below entry
- 2Exit minus entry1.2032 − 1.2002 = 0.0030, or 30 pips
- 330 pips × 10 US dollars = 300 US dollars
The position gains 300 US dollars before any commission or overnight charge.
A common mistake
A long position showing a gain has not yet earned that gain. Until the position is closed the result is floating, and it changes with every price move.
Check yourself
Educational information, not investment advice or a recommendation to trade.