NoaFX Tutorial

2.5 How you can sell a pair without owning it?

One of the most common and misunderstood concept in Forex trading is the concept of selling or shorting currency pairs. Often, this challenge comes from traders who have been trading in conventional markets.

Their challenge is;

QUESTION: How can you sell a currency pair when you have not bought it in the first place? Therefore, how can you sell an instrument without owning it?

Selling a Currency Pair

The concept of selling a currency pair is once again pegged back to the concept of pairing currencies. Note that we are speculating on which currency will move against which currency.

Therefore, when we are buying a currency pair;

Therefore, notice once again, that we are not buying and selling currency pairs speculating on their actual absolute value appreciation/depreciation.

We are quite simply speculating on which currency will move against which currency and buying appreciating currency against the depreciating currency.

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