What does it mean to be short and long in the currency circle?

In the cryptocurrency market, short-selling means predicting that the price will fall, borrowing cryptocurrency to sell at a high price, and buying back at a low price to make a profit; long-selling means predicting that the price will rise, buying at a low price, and selling at a high price to make a profit. Go short or long through exchanges or brokers that offer leveraged trading, but there are risks, especially shorting that can result in unlimited losses.

Short-selling and long-selling in the cryptocurrency market

In the cryptocurrency market, short-selling and long-selling are two common trading strategies that involve predictions of future price changes.

Short selling

Short selling means predicting that the price of a cryptocurrency will fall and making a profit by:

• Borrowing cryptocurrency from a broker and selling it at a high price
• When the price falls, buy it at a low price Return the borrowed cryptocurrency
• Return the borrowed cryptocurrency to the broker and take the difference as profit

Go long

Going long means predicting that the price of a cryptocurrency will increase and making a profit by:

• Buy cryptocurrencies at low prices
• When prices rise, sell at high prices
• Earn the difference as profit

How to go short or long

To go short or long you need to use the provided Cryptocurrency exchange or broker for leveraged trading services. Leveraged trading allows traders to trade using borrowed funds, magnifying potential profits or losses.

Risk

Both short and long trading involves risk. If predictions are wrong, traders can suffer significant losses. Short selling is especially risky because the potential for cryptocurrency prices to rise is unlimited and the losses are theoretically unlimited.

Example

Suppose a trader predicts that the price of Bitcoin will fall from $10,000. They can borrow $1,000 worth of Bitcoin from a broker and sell it at a high price of $9,500. If the price of Bitcoin drops to $8,500, traders can buy back the borrowed Bitcoin at a low price and return it to the broker. They will make a profit of $1,000 because they sold the Bitcoin for $9,500 and bought it back for $8,500.

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