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Short Selling – Forex Trading Strategy that Works

Among different strategies for online trading special attention has been given to the idea of Short selling. You definitely heard “go short” phrase from traders during discussions or while studying the basics.

Short selling is used by traders when they can predict the depreciation of one currency. Let’s say you know that the rate of a certain currency is going to fall and want to gain profit on this. In such case, you are just setting a sell order on a currency pair where a quote currency, in your opinion, will lose its value. If it does, after some time, you will close this order to make money. Let’s consider the example:

For example, you’re confident that the Canadian Dollar will fall in rate in the nearest future. Following that, you may pay attention to USD/CAD currency pair where the US Dollar is the base currency and the Canadian Dollar is the quote currency. USD/CAD price is 100.00. You click on the sell button, wait for a while for lowering the price. It finally reaches 98.00, just as you thought, so you close your trade. Simple calculus demonstrates that you earned 200 pips of profit by going short.

The main risks of short selling

However, as with other trading strategies, Short selling involved a risk of making a bad deal. What may go wrong is that despite your forecast the interest rate of a chosen currency raised. It is noteworthy that the value could keep rising without any limits to how far the value could rise. That is why traders are encouraged to put in stop-loss just to be safe.

Attractive approach for making money

It’s far easier sometimes to predict the rate of which currency is going to fall. You encounter with financial news, expert opinions or some interest rates’ trends of change almost every day, especially on crypto market. Take a look at Bitcoin, Ethereum, or other altcoins which had lost value threefold and more since the beginning of the year. Although rather than losing your money you could make some money only by using Short selling on Forex.

Trusted and appropriate Forex Broker

Far not every Forex Broker offers crypto trading on its accounts. At the same time, it’s very important to find a reliable one with good trading conditions. JustForex is one of the main brokers that provides traders the access to the foreign exchange market offering wide choice of trading instruments.

JustForex offers its clients to trade 13 cryptocurrency pairs including most popular and valuable cryptocurrencies for investors. Crypto accounts from JustForex have a wide range of cryptocurrencies to trade, competitive spreads from 0, up to 1:3 leverage. Minimum deposit is not required. By the way, cryptocurrency pairs are also available on Standard and ECN Zero accounts.

JustForex is a broker which helps people to earn on the financial markets providing them with the beneficial conditions. Being an international broker and working with clients from different countries we understand that every person is unique with his own values, no matter whether he is a trader or a partner. When our team develops the services of the company, we take into account the variety of cultures, nations, trading experience and demands of our clients. JustForex offers several trading account types with a wide choice of trading instruments and everyone can find the most suitable one according to his preferences.

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