When you âgo shortâ you are simply placing a sell order on a currency pair.
In forex trading all currency pairs have a base currency and a quote currency. The quote will usually look something like this: USD/JPY = 100.00. The USD is the base currency and the JPY is the quote currency. This quote shows a rate of $1 US Dollar being equal to 100 Japanese Yen. When you place a short trade on this currency pair, you are going short on the USD Dollar and simultaneously going long on the Japanese Yen.
It sounds complicated, but you would make this trade if you believed that $1 was going to worth less than 100.00 Japanese Yen(i.e. $1 = 99.00JPY)
Unlike the stock market, in forex trading going short is as simple as placing your order. There are no special rules or requirements for going short on a currency pair.