Short the Pound – How to Trade Against the Pound

Forex trading involves predicting how the value of currencies like the Pound will move – but it also requires having robust strategies in place to limit your losses should the market move against your predictions. That’s why it pays to stay in touch with key economic indicators, political events and the overall market sentiment.

Traders betting against the short pound have made impressive returns since the Brexit referendum in 2016 and with the pound falling to 34-year lows against the dollar, the currency is attracting short bets from traders. But, as this article from Telegraph Money explains, this is a high-risk strategy that can easily lead to substantial losses.

Trading on the Go: Top Forex Trading Apps for UK Users

One of the easiest ways to trade against the pound is through spread betting or CFDs with brokers such as Trading 212. Simply open a new account and select CFDs as your trading instrument, then choose GBP/USD from the Products tab in our Next Generation platform. Once you’ve opened the chart, click sell to open a short position or buy to enter a long position.

You can also use the pound to hedge against AUD/USD or NZD/USD trades as it tends to be positively correlated with them. However, keep in mind that correlations are based on historical price data and may not necessarily persist in the future. That’s why it’s important to monitor the pound closely and be ready to close your position as soon as the correlation turns against you.