Positions & Sizing

Q: What is a long position?

A long position is when you buy a financial asset, expecting its price to rise so you can sell it later at a profit.

Q: What is a short position?

A short position is when you sell a financial asset you don’t own, aiming to buy it back later at a lower price to make a profit.

Q: What is position sizing, and how does it affect trading?

Position sizing is the process of determining the amount of capital to risk on a single trade. Proper position sizing helps manage risk and maximize potential returns while avoiding excessive exposure.

Q: What are pips and how are they calculated in forex trading?

A pip is the smallest price movement in a currency pair in the forex market, usually the fourth decimal point. Pips are used to measure price changes and calculate profit or loss.