Is "short covering" just profit taking on the short side? | Forex Factory

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Is "short covering" just profit taking on the short side?

  • #1
  • First Post: Feb 23, 2016 7:40pm Feb 23, 2016 7:40pm
Hi all,

I was watching a guy talking about "short covering", which apparently explained the bounce of certain fx pairs...
Is "short covering" just profit taking on the short side? I'm confused

Thanks
  • #2
  • Feb 24, 2016 1:21am Feb 24, 2016 1:21am
Any "bounce" is caused by traders losing money
When you hear / read that the market did this or it did that on "profit taking", it must be understood as "loss taking"
  • #3
  • Feb 24, 2016 1:48am Feb 24, 2016 1:48am
Quoting alt11
Hi all, I was watching a guy talking about "short covering", which apparently explained the bounce of certain fx pairs... Is "short covering" just profit taking on the short side? I'm confused Thanks
Some large players cannot close loosing milions or billions, they cover, aka hedge their positions.

This is the true meaning the covering. They cover their positions with an opposing size to "freeze" the P/L.

Otherwise, they face huge losses
Buy at the Low, Sell at the High You make money by waiting not by trading.
  • #4
  • Feb 24, 2016 1:50am Feb 24, 2016 1:50am
I see thanks
  • #5
  • Feb 24, 2016 2:30am Feb 24, 2016 2:30am
Quoting alt11
Hi all, I was watching a guy talking about "short covering", which apparently explained the bounce of certain fx pairs... Is "short covering" just profit taking on the short side? I'm confused Thanks

Yes it is...To get out of a long you have to sell which is called closing a long,
to get out of a short you have to buy which is called covering a short,
I think it comes from when trading was only done on the phone,for example a million is a million but
a billion is a yard,it was this way so it couldn't be confused.
  • #6
  • Last Post: Feb 24, 2016 5:13am Feb 24, 2016 5:13am
Thanks Robbie
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