Questions regarding foreign exchange online trading
"Short selling" is a method of trading that includes selling a security (in this case currency) that the trader doesn't own, by borrowing it from a broker.
Prices on forex trading websites are quoted at the current market price, meaning that people around the world are buying and selling at that price at that time. Brokers buy for slightly under market price and sell for slightly over, and they are the ones who actually trade with the average currency trader. 
In the scenario where there are more sellers than buyers at a current price, all buyers at that price level will make their purchases and then the price will drop so the market includes more buyers. Demand &lt; Supply so price falls.
People trade currencies for many reasons. Forex trading as an investment does not make up the majority of currency exchange. Businesses that are involved in international trade need different currencies to pay for operations in other countries, to import goods from other countries, etc. and visitors to foreign countries have to buy the currency of those countries. Therefore price changes are not primarily affected by investor activity and many people/businesses do not win or lose on purchasing a currency because they do not hold it as an investment but just spend it.


Hope this helps. 

http://www.dailyfx.com/forex/education/trading_tips/trend_of_the_day/2012/02/07/Short_Sell_Basics.html

http://www.econedlink.org/lessons/index.php?lid=342&amp;type=student