Recently, someone asked me again what exactly is going long and going short, so today I’ll thoroughly explain this basic logic.

Actually, many people can’t distinguish between bullish and going long. Being bullish is simply a judgment—you think the price of the coin will go up, but that’s just an idea. Going long, on the other hand, is different; it’s an actual action—you really buy in. In the spot market, as long as you buy, you are going long, then wait for the price to rise and sell to make a profit from the difference.

Let me give you a real example. Previously, when ETH was $1,480, I was optimistic about its prospects, so I bought it directly. Later, it rose to $1,620, and I sold it, netting a profit of $140. The whole process is called going long. The logic is simple: buy low and sell high. If you add leverage, the profit is multiplied, but of course, so is the risk.

So what about going short? The situation is the opposite. Being bearish means judging that the coin’s price will fall, but going short is the actual operation. In the spot market, you can’t directly short, but you can achieve it through futures or leveraged contracts.

The logic of shorting is like this: suppose a coin is now $10, and you judge it will fall. But you might only have $2 or $3, which isn’t enough to buy a coin. No problem—you can use your $2 as margin, borrow a coin from the exchange. After borrowing, you immediately sell it on the market, so you now have $10 in cash.

When the coin’s price really drops to $5, you use $5 of your $10 to buy back a coin, return it to the exchange. The remaining $5 is your profit. That’s the whole process of making money from shorting. But note, if the coin’s price doesn’t fall as you expected and instead rises, your margin will suffer losses. If the loss exceeds your margin’s capacity, you’ll get liquidated, and your principal could be lost entirely.

In fact, both longs and shorts don’t refer to a specific person or institution, but rather to a group of investors who share the same view and market expectations. Those who go long are optimistic about the future market, while those who go short are bearish. Both sides are constantly competing in the market.

To put it simply, if you want to survive in trading for the long term, you first need to understand the essence of going long and going short—one is buying low and selling high, the other is selling high and buying low. Grasping this logic allows you to participate in the market more rationally.