Forex trades exist when a trader buys one currency expecting it to increase in price against another currency – otherwise known as going long. The trader can also sell a currency expecting it to fall in price – termed going short.

Forex trades are based on the facility to profit from the change in price. If the trader opens a trade to go long and the price increases, the trader will profit. If the trader opens a trade to go short and the price again goes up, then the trader will have made a loss.