Long and Short in crypto: Understand clearly to avoid getting "smashed" in the market

Want to trade crypto but don't understand go long/short? That's why you're losing money.

Today I will explain these two concepts in the simplest way possible.

What is Position?

Position = Your position in the market. Simply put: what do you hold, where are you betting.

There are 2 main types of positions:

• go long (buy position): You buy coins, with the market going up in price.
• Short position (short position): You sell coins, and the market goes down.

longs = Buy with the expectation of price increase

Long traders are those who believe the price will increase. Strategy:

1. Buy when the price is low ( or is expected to rise )
2. Wait for the price to go long
3. Sell, take profit

Tip: Do not all-in on a position. Split your funds and buy at different levels. When the price really goes up, you will take profits in parts, never regretting it.

Example: Buy EUR/USD = Buy EUR + Sell USD

Short = Expecting a price decrease shorts

Short traders are those who believe the price will decrease. Strategy:

1. Short coin ( using leverage/margin)
2. Wait for the price to drop
3. Buy back cheap, lock in profits

This method is riskier because it requires leverage. If you predict incorrectly, you could be liquidated.

Example: Sell EUR/USD = Sell EUR + Buy USD

The panic psychology when longs/shorts are too concentrated

This is the most dangerous thing.

When too many traders go long:

• The red color covers the entire chart
• The market is FOMOing to a crazy extent.
• Prices skyrocketed in just a few hours
• Then… boom! Liquidated en masse

When too many traders go short:

• Everyone shorts at the same time
• The price is plummeting uncontrollably.
• The further down it goes, the more people panic sell.
• Result: disastrous crash

Experience: When everyone is going long, that is when the top is near. When everyone is shorting, that is when the bottom is close.

Safe Playing Methods

• Set stop loss for all transactions
• Do not use excessive margin - high leverage = quick death
• Open trades = no real money yet: Profits and losses are just “paper” until you close the order.
• Always have a plan B: If wrong, how much will you lose?

Go long shorts is not complicated, but the mentality of new traders is often the culprit. Being cautious is wise, FOMO is foolish.