Forex glossary
Long position (bullish position)
A position whose price-based result in a linear model improves as its closing price rises above its opening price. Retail FX longs open by buying at Ask and close by selling at Bid; costs can reduce the net result.
Illustrative example
How does it work in practice?
In a hypothetical linear EUR/USD trade, 5,000 EUR is bought at ask 1.1000 and sold at bid 1.1020 USD per EUR. Price profit is 10 USD using execution prices, before fees.
Why do buying and selling use different prices?
Two prices and two position directions
EUR/USD model: bid 1.1000 and ask 1.1002 USD per EUR; one pip is 0.0001. No commission, financing or slippage.
On a narrow screen, the table can be scrolled horizontally.
| Term | What it describes | Shared example |
|---|---|---|
| bid and ask (bid-ask prices) | The client sells at bid and buys at ask. | Buying 1,000 EUR costs 1,100.20 USD; selling it receives 1,100 USD. |
| spread (bid-ask spread) | Ask minus bid, rather than a separate amount to deduct again. | 1.1002 − 1.1000 = 0.0002, or two pips. |
| Long position (bullish position) | Buying opens a long; selling closes it. | Immediately closing 1,000 EUR at unchanged quotes gives −0.20 USD. |
| Short position | Selling opens a short; buying it back closes it. | Selling 1,000 EUR at bid and repurchasing at unchanged ask gives −0.20 USD. |
Takeaway: Direction determines the order of buying and selling. P/L calculated from the correct fills already reflects the bid–ask difference.
Change an assumption, see the result
What changes if…?
Compare a long’s entry Ask with the Bid for its immediate close. Change spread and EUR quantity; the model keeps quotes unchanged between the two moments.
EUR/USD model: 1 pip = 0.0001. Long: buy at Ask, close at Bid; short reverses the sides. Quotes stay unchanged between entry and exit. No slippage, commissions or swap.
Check your understanding
Calculate long P/L from opening ask, closing bid and the stated quantity.
Show the answer and explanation
+10 USD
(1.1020 − 1.1000) × 5,000 = 10 USD. This uses opening ask and closing bid, before additional costs.
From quotes to position units
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Related terms
Sources and documentation
- MetaTrader 5: basic trading principles
Orders, deals and positions; FOK, IOC and partial-filling policies.
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