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What is the Long & Short Position in the Crypto Market?

There are terms that everyone who enters the crypto money market has heard since the first day, but always confused. The two terms that arouse the most curiosity are the terms "long and short position". These terms reflect whether the value of units will increase or decrease in cryptocurrency trading. To put it briefly, if a currency is thought to rise, a long position is called a short position if it is thought to fall. For this reason, the term long position is used for buying, while the term short position is used for selling.


Long Position

To explain the term long position with a simpler example, you thought that gold prices would rise and you want to take advantage of this opportunity more. 1 bar of gold is $1000. Let's say you only have $1000 to invest. But you want to buy 3 bars of gold, not 1 bar, thinking that gold will appreciate. For this reason, when buying gold, you buy 3 bars of gold with 1000 $. Even if you don't have 3 bars of gold, you are making a promissory note that you have 3 bars of gold. If gold rises later, you pay off your debt and get your profit. However, if it falls, you do not make a profit, and you may even lose all your money.


Therefore, in investments that require such expertise, you definitely need to know how to read graphics very well. In fact, we recommend that you follow the entire market closely, not just read the charts. In addition, in some cases, even if you do all these, since the cryptocurrency market has a volatile structure, even a statement made by an important name in any political or economy can reverse all this.


Short Position

A short position, on the other hand, is to sell while the price is still high, assuming that the vehicle you invest in will experience a decline. Again, if we go through the example, you have 1 bar of gold and you assume that the gold will fall. On top of that, you sell 1 bar of gold when its price is high, and then you buy gold again when the price of gold drops. Thus, you have both 1 bar of gold and your profit.


The examples given here are for illustrative purposes only. It is therefore completely independent of the market. If you want to earn long or short on the cryptocurrency exchange, you should definitely make an evaluation in line with your own research. HafizeBot analyzes all the coins that can be traded on Binance Futures for you and analyzes 240+ indicators and generates artificial intelligence signals for you to trade. It also provides the opportunity to autotrade with these artificial intelligence signals. You can use the demo account for free right now.