The big picture of EUR/USD is not lying: We are facing a decline this year. The top has already been build.
The Euro-crisis is yet not over. Although ESFS volume was raised problems with Greece are not solved. What will happen if more and more states are lend money which they cannot pay back?
On the one year scale we see that EUR/USD is currently trailing at a strong inner resistance. Also RSI(5) is indicating an overbought signal, which historically results in sell-offs.
After the steep rally of the last weeks this seems to be a perfect entry point for a short.
To "short" a market means that you profit from falling price.
There are several ways to do this:
1) Shorting stocks
You lend a stock from your broker by leaving a certain margin. After that you sell the stock at the current market price. After a while, e.g. when the target has been reached, you buy it back, in order to get back your margin from the broker.
Let's say you sold the stock for 100$ and bought it back for 70$ later. This would mean that you made a profit of 30$.
2) Shorting futures / options
Basically the same as with stocks. However, futures/options require a higher capital to trade than stocks, so to directly long/short those you should at least have 10k $. Also futures / options are not traded on the stock exchange but on special future exchanges.
3) Put option warrant
This is a documented option which is available for trade at the stock exchange. "Put" is equal to "short". Option warrants sell at a lower price than the underlying instrument, which allows individual leverage, depending on which warrant you choose.
4) Turbo-/ Knock-Out Certificate / Mini-Future
All of these are the same thing. Certificates are similar to option warrants, but with the "advantage" that they are not influenced by volatility changes. The short variant of these documents have the prefix "bear", "put" or "short". For example "mini-short future" and "wave-put".
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