Long position

Being "long" means you own, or have bought exposure to, something and benefit if its price goes up. Its opposite is a short position.

In forex

Buying a currency pair means buying the base currency and selling the quote currency. So long EUR/USD is a position that gains if the euro strengthens against the dollar. Being long USD/JPY is long the dollar and short the yen.

With CFDs and spot forex you do not actually take delivery of the currency. The position simply reflects the price change.

Worked example

You buy 0.5 lots (50,000 euros) of EUR/USD at the ask of 1.0850.

• Price rises and you close at the bid of 1.0890: a gain of 40 pips. On 0.5 lots each pip is worth 5 dollars, so the gain is 200 dollars before swap and commission.
• If you close at 1.0820 instead, you lose 30 pips, or 150 dollars.

Note that a long position opens at the ask and closes at the bid, so the spread is paid on the way in.

Practical notes

• Holding a long position overnight incurs a swap credit or debit, depending on the interest rate difference and the broker's mark-up.
• Being long several USD-quoted pairs at once (EUR/USD, GBP/USD, AUD/USD) is largely one bet against the dollar. See correlation.
• Decide your stop-loss and size before opening, not after.

See what is a CFD and the profit and loss calculator.