Trade Stock Indices

Buy - Going Short in Stock Index Trading

In Index Trading, participants have two potential actions: either to initiate a buy position or to initiate a sell position.

When a trader buys a stock index this is called going long

When a trader sells a stock index this is known as going short

Go Long

A trader will buy a stock index if they think it's going to go up based on their analysis. When a trader buys at a particular level the stock index must move up for the trader to make a profit. This buy trade also referred to as going long is displayed and illustrated and shown below.

How Do I Trade Tutorial? - How to Buy Stock Index

In the case of this long buy trade, the trader's profits will continue to accrue as long as the targeted stock index maintains its upward price momentum, as visually demonstrated above.

Go Short

If a trader thinks that a particular index is going to move down, then trader will execute a sell position, trader will then make a profit as long as the stock index continues to move down as is shown below. This is referred to as going short.

Buy Sell Strategy - How Do I Buy Stock Index?

The trader can continue profiting from this trade as long as the index keeps moving downward.

Traders rely on technical analysis to predict market movements. Once the likely direction is determined, they proceed with opening either buy trades or sell trades based on their analysis.

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