New to the crypto market, I realize there are two very important things to understand clearly — trading and holding. But if you stop there, it’s incomplete, because trading involves dozens of terms you need to master. Today, I want to share about long and short positions, because this is truly the foundation that every trader must understand.

First, you need to know what a position is. It simply refers to your holding status in the market — how much of a certain pair you own, and what your plan is with it. In crypto, positions are divided into two main types: long position and short position. This is very important because it determines how you make a profit.

So what exactly is a long short? Long means you buy a pair with the expectation that the price will go up. You invest money, wait for the market to rise, then sell at a higher price. Most traders don’t put all their money in at once but split it into multiple buy orders at different prices. When the price actually increases, you start taking profit from each long position, and the profit will be credited to your account.

Conversely, short means you predict the price will decrease. But the difference is you don’t need to own the money beforehand; you can short sell using leverage. When the price drops, you close your short positions to take profit. So how do long and short compare? They are two sides of the same coin — one bets on the rise, the other bets on the fall.

But what’s really interesting is investor psychology. If everyone shares the same view — for example, everyone thinks the price will go up — they will all start buying. When a large number of long positions are opened simultaneously, the price can spike rapidly in a very short time. The opposite also happens — when everyone is short, the price plummets. That’s why understanding what long and short are isn’t just a technical concept, but also closely related to market psychology.

One very important thing I’ve learned is to always set a stop loss for each order. Whether you’re long or short, if your prediction is wrong, losses are unavoidable. Therefore, understanding what long and short are and how to manage risk will help you survive longer in this market.

Remember, until you close your position, all profits and losses are only on paper. Only when you sell (close the position) do the profits or losses actually hit your account. So be patient, manage your risks well, and you will have a chance to succeed in this game.