Going long means buying an asset with the expectation that its price will rise, so you can sell it later at a profit. Most Australian traders go long every time they buy shares on the ASX, open a CFD buy position, or purchase forex expecting a currency to strengthen.
How Going Long Works — A Practical Example
Suppose you believe the ASX 200 index is about to climb. You open a long CFD position worth A$10,000 on the ASX 200 at an index level of 7,500. Your broker charges a spread of 1 point on entry.
Two weeks later the index rises to 7,800 — a gain of 300 points, or 4%. Your A$10,000 position is now worth A$10,400, giving you a gross profit of A$400 before any overnight financing costs. Had the index fallen to 7,200 instead, your position would be down A$400, illustrating that going long always carries downside risk if the market moves against you.
The same logic applies when going long on AUD/USD. If you buy A$10,000 worth of AUD/USD at 0.6500 and the pair rises to 0.6600, your position gains roughly A$154 (100 pips of movement). You can use a pip calculator to work out exact profit and loss figures before you enter any trade.
Why Going Long Matters for Australian Traders
Understanding the difference between a long position and a short position is fundamental to managing your risk correctly. When you go long, your maximum loss is limited to the full value of your position — the asset cannot fall below zero — whereas short selling carries theoretically unlimited loss if the price keeps rising.
ASIC’s leverage limits for retail CFD traders, introduced in 2021, directly affect how much capital you need to go long on a leveraged product. For major forex pairs you can use up to 30:1 leverage, meaning a A$333 margin deposit controls a A$10,000 long position. For indices the limit is 20:1, and for crypto it drops to 2:1. These caps are designed to protect retail accounts from losses that exceed their deposit. If your position moves against you, your broker may issue a margin call requiring you to add funds or close the trade.
Brokers that handle long positions well provide transparent overnight swap rates (you typically pay a financing fee for holding a leveraged long position past the daily rollover), tight spreads on entry, and fast execution so your fill price matches what you saw on screen. A broker with poor execution can cost you several pips every time you enter a long trade, which adds up significantly over hundreds of trades per year.
Going Long vs Going Short
Going long means you profit when a price rises; going short means you profit when a price falls. Short selling in Australia is restricted for ordinary share accounts — most retail traders can only go short using CFDs or other derivatives. Going long is available on virtually every platform, including standard share trading accounts. Both strategies carry real risk, but short positions can theoretically produce losses larger than your initial outlay if prices surge. For most Australian traders, understanding leverage is the more important factor to check before opening either type of position.
What to Check When Comparing Brokers
- Spread on entry: A tighter spread means a lower cost every time you go long. Compare the advertised spread on your preferred asset — gold, AUD/USD, or the ASX 200 — across multiple brokers before opening an account.
- Overnight financing rates: Holding a long CFD position overnight incurs a swap charge. Ask the broker for their exact daily rate formula so you can calculate the true cost of holding a long trade for days or weeks.
- ASIC licence: Only trade long positions through an ASIC-licensed broker (check the ASIC register). Brokers such as Pepperstone hold an Australian Financial Services Licence and are subject to client money protections under the Corporations Act.
- Negative balance protection: ASIC requires retail CFD brokers to offer negative balance protection, meaning your long position losses cannot exceed your account balance — important if the market gaps overnight.
- Order types available: A reliable broker lets you attach a stop-loss and take-profit to every long position at the time of entry, making risk management straightforward even for new traders.
See our picks for the best CFD brokers in Australia — all ASIC-licensed, all live-tested by our team.
Trading CFDs carries significant risk. 70–80% of retail accounts lose money. ASIC regulated. We may earn commission via links.