Buying and selling — going long, going short

"Going long" just means buying — you think the price is going up, so you buy now to sell higher later.

"Going short" means selling first — you think the price is going down, so you sell now, planning to buy it back cheaper later. This confuses a lot of beginners because it feels backwards, but it's the same idea in reverse: buy low, sell high, just in a different order.

In forex, you can do both freely, any time. Unlike a lot of other markets, there's no rule that says you have to own something before you can sell it.

Shorting confuses beginners because it feels like selling something you don't own — and in a sense, you're not. Your broker is essentially lending you the position temporarily so you can profit from a fall, then the trade settles the difference when you close it. You never actually take delivery of currency either way; it's all settled electronically as balance changes in your account.

One subtlety worth knowing early: markets tend to fall faster than they rise. Fear moves quicker than greed. That's not a rule to trade on blindly, but it's part of why short positions can sometimes hit their target faster than a similarly-sized long position, purely because of how sharply sentiment can turn.