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What is a “Short” and a “Long”?
The terms “long position (a long)” and “short position (a short)” are key concepts for the stock exchange. Despite what their names suggest, these fundamental trading strategies have no connection with the transaction duration.
Long Position (or Long)
A long (or long position) is the main method of trading wherein a trader expects the asset to rise in value over short or long term. In other words, the trader buys cryptocurrency “in the hope of growth”. This is what “bullish” traders do. Traders who go long on cryptocurrencies virtually shoulder the entire market preventing cryptocurrencies from falling in price too much.
Short Position (or Short)
A trader who “goes short”, i. e. enters into a short position, sells cryptocurrency with the expectation that it will fall in value.
Short positions allow the trader to make profit when cryptocurrencies become cheaper. In this case the trader borrows tokens or buys them on credit. They sell the tokens at the current price during a downturn and buy them back at a lower price in order to cover their debts. Traders who choose this strategy are “bearish”.
Experienced traders can make profit on both long and short positions. However, most of them will only opt for one option rather than use both. Please note that long positions are much more favorable for the growth of the cryptocurrency market.