Trading: What going long or going short means and when you should

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Most traders especially those that are novices are often confused about the long or short position. If you are a beginner trader or an expert you will agree with me that during your days of learning you were confused about these two terms long/short which are used to describe buy/sell.

Like, one of my friends who after watching a video of someone trading, and seeing the profits the person made, immediately entered the market with no direction and blew his $10 to $0.4.

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What does going long or going short means

_{screenshot gotten from Binance}

As a trader whatever cryptocurrency that you have decided to trade, it is either you go long or short based on the analysis you have carried out on the underlying cryptocurrency.

From your analysis, you will then know if the price of the underlying cryptocurrency will be bullish or bearish since the price of cryptocurrencies doesn't remain constant but fluctuates up and down.

Your decision will then come based on how you have seen the market, and believe the market of the underlying cryptocurrency will perform (move).

_{screenshot from Tradingview app}

In this, if you are sure or think that the price of the underlying asset you have analyzed will rise which is bullish, you can take a long position which means buying the underlying cryptocurrency to sell it at a higher price than that which you are buying it.

On the other way round, if you are sure or think that the price of the underlying asset you have analyzed will fall which means bearish, you can take a short position which means selling the underlying cryptocurrency to buy it back at a lower price.

_{screenshot from Tradingview app}

It doesn't matter if you go long (buy) or short (sell), what matters is for your prediction to be correct if it is correct you will make profits, but if is not you will make a loss especially if the position you open is via future trade.

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The difference between long position and short position

Firstly, before we dive into the difference between a long position and a short position let's, take a close look at the screenshot shared for both spot trading and Binance future trading.

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Long position

Spot Trading	Future Trading

Long position is the name that is used to describe buying which is usually indicated with green color. You can open a long position (buy) when you believe that the price of the underlying cryptocurrency will rise further. In a chart, all the green candles are representative of a bullish market which means you can go long (buy)

For example, if you believe (think) that the price of Steem will go up further while expecting positive news from the Steem blockchain or the crypto market as a whole you can go long by buying Steem and resell it when the price is higher.

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Short Position

Spot Trading	Future Trading

Short position is the name that is used to describe selling which is usually indicated in a red color. You can open a short position (sell) when you believe that the price of the underlying cryptocurrency will fall further. In a chart, all the red candles are representative of a bearish market which means you can go short (sell).

For example, if you believe (think) that the price of Steem will fall while expecting negative news from the Steem blockchain or the crypto market as a whole you can go short (sell) and rebuy it at a lower price to have more quantity of Steem..

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How you can open a long position or short position

You can't open a long or short position on air, you will need to open in a crypto trading platform, such as Binance, mexc Bybit, Polenix, and many others.

Once you have a trading account, the next thing you should do is explore and analyze the market using Tradingview or the chart provided by the trading exchange to know if you are to take a long (buy) or short (sell) position.

• Choose the currency you want to trade
• Analyze the market
• Open your real or demo account
• Enter the amount you want to use and trade
• Select your position size and manage your risk properly. This includes setting your stop-loss & take-profit
• Select the "buy to go long, or the "Sell to go short".
• After you have placed your trade begin to monitor it.

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Conclusion

_{Long position and short position are the two ways of describing buying and selling cryptocurrency and other financial assets when it comes to trading the crypto or forex market which we have learned in this post.}

Note; _{this post is not investment advice or in any way telling you to buy/sell when you do not fully understand the market. The post is meant for educational purposes.}