Being a Danish newbie doesn't help when there is foreign terms written.

melsen

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I'm sitting here reading various posts on the forum to get as much knowledge as possible.

One thing I simply haven't understood is the term , to "go long"... ?!?!?

Sorry if that seems like a totally moronic question, but I'd rather ask one time too many to make sure I understand, than take a wild guess and end up not understanding any of it...

Ps. Note to guide-writers... Write them in danish =) *grins*

- Allan
 
Melsen: I hope this is the Answer you were after:
To Go Long
This means that You are buying in the anticipation that the price will rise in your favour.
eg: go long at 10200 hoping that it will go to say 10250.

To go short:
This means that you are taking a view that the price will decline and hence you will sell.
eg: you go short at 10120 by selling in the hope that it falls to say 10100.
I hope this helps.

So as a summary : Buy to go long and sell to go short.
 
Hrmm... I see. Well.. that added another step to my confusion.. especially when combined with FTSE's guide... after having viewed the graphs and so on, to see how the climbed and fell, to learn how to understand support, resistance and trendlines... then I would already in his guide have understood it as if I had the stocks when figuring out when to sell. When I then read that I should "go long".. that didn' t make sense.... in that phrase, would it then mean to wait a bit longer in anticipation of the price climbing just another level, or?
 
When you acquire a stock in anticipation of it going UP in price, you go long.
To open a position you BUY and to close the positon you SELL.
The usual expression is 'Long at 110, Sell at 120' to give you a profit of +10.

When you acquire a stock in anticipation of it going DOWN in price, you go short.
To open a position you SELL and to close the position you BUY.
This is usually expressed as 'Short at 120, Cover at 110' to give you a profit of +10.

And if you are FLAT you do not have any position and are out of the market.
 
Going Long -
I buy shares with the idea that the price in the market will rise, then I can sell them at a higher price and make a profit.


Going Short -
I expect a share price to go down, so I sell shares that I don't yet own. Then when the price goes down, I buy them back at a cheaper price. That also makes me a profit.

In both these occasions I have bought at a lower price and sold at the higher price. It is just that 'going long' is the 'normal' way of doing it - buy , then wait for the price to increase so that you can sell the shares at a higher price. Going short is the other way around - I sell first at the higher price, then buy at the lower price.

It doesn't make a difference if you wait or not before entering the trade. Going Long or Short are simply the two most common terms used to describe what 'direction' you have traded.
 
In both these examples below, we enter the trade at point A, then exit at point B


Going Long, we Buy at point 'A', then sell again at point 'B'


Then Going Short, We enter the trade by 'Selling' shares we don't own (we have borrowed from the broker), then cover ourselves by buying the shares to replace them again at point 'B'
 

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Oh my GOD.. yet another confusing thing....

You can actually SELL stocks/shares you don't even have??!

Amazing.. I had no clue about that.
 
melsen said:
Oh my GOD.. yet another confusing thing....

You can actually SELL stocks/shares you don't even have??!

Amazing.. I had no clue about that.
....then you are the lucky one...!!!
 
SUNSEEKER who "sometimes" posts on here is a fellow Dane, may be a PM to him might be far easier.....??? You guys seem to speak better english than a lot of us "locals" :))))
 
hehehe... Well, thank you so much. That certainly is a nice compliment.

And as for SunSeeker... thanks for telling me... I think I'll send him a PM right away.
 
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