In the forex market, the positions defined as the excess of carrying amount in foreign currencies. If you make a fresh purchase or sales of forex currencies, it is called as taking position or making position. In the interbank market, the word, position is often used when the position amount changes, i.e., "Making my position double" or "Cutting position to some extent". Be advised that this word is frequently found in the real forex market.
Long position and short position
The purchase and sales of forex currencies follows the position change. Assuming the warehouse, decreasing inventories prompts replenishing by purchasing products. It is possible to make your position in minus although the inventories or cashes never fall short. This condition is called as sales position or short position and the opposite position as purchasing position or long position.
Forex trade is to exchange different two currencies each other, and then, the purchase of USD-JPY is quite often expressed dollar-long and Yen-short.
The fresh purchase or sales of forex currencies is called as position making. The basic stance for investment is to buy low and sell high, or to sell high and buy low. You can take profit if your market view meets but lose money if does not meet, then, it follows that the profit or loss is dependent on the timing of position making. Many professional investors make much use of the technical analysis for seeking the significant points on taking profit or cutting loss. We recommend for the forex beginners should refer to "Technical analysis in forex" shown in below.
Square position means no position and there is no risk against market movement. This word is the essential terminology as well. Emphasizing here that you could stay at square position when you cannot find the clear vision in the forex market, as saying "Waiting is also the market".