Long – Buy Order

Going Long: Opening a Buy Position

A long position is initiated when a trader anticipates an increase in the market price of an asset. It serves as the inverse of a short position.

How Long Positions Function

When entering a long CFD trade, you do not acquire actual ownership of the underlying instrument. The overall outcome is determined by the price gap between execution and exit, contract sizing, and associated transaction fees.

Practical Example

If you enter a trade at 100 and exit at 110, the upward price difference can yield a profit. Conversely, if the market declines to 90 at closure, the trade results in a loss. Final balance changes will depend on lot size and relevant trading expenses.

Risk Management for Long Trades

Before entering the market, define your risk tolerance. Utilizing tools like stop-loss and take-profit orders can help manage exposure, though execution at exact specified levels is not guaranteed during market gaps or sharp volatility spikes.

Keep in mind that long positions decline in value as market prices fall, and using leverage will amplify the financial impact of even minor price fluctuations.