Someone asked me about Long and Short trading frequently. So I will clearly summarize what short and long are and how to use them effectively.

Starting with the Long order first. A Long Position means we place a buy order for that asset, expecting the price to go up. When the price indeed rises, we close the position by selling to profit from the price difference. It’s buying low and selling high. For example, if we buy a stock at 350 baht expecting it to go up, and the price moves to 400 baht, we sell and make a 50 baht profit. But if the price drops back to 300 baht, we incur a 50 baht loss.

A Short Position is the opposite. We place a sell order first, expecting the price to decrease. When the price drops, we buy back at a lower price to profit from the difference. It’s selling high first and then buying back cheaply later. For example, we sell a stock at 350 baht expecting it to fall. When the price drops to 300 baht, we buy back and make a 50 baht profit. But if the price rises to 400 baht, we have to buy back at a higher price, resulting in a 50 baht loss.

The main difference is that Long profits from rising prices, while Short profits from falling prices. Both methods allow traders not only to profit during bullish markets but also to make gains when the market is bearish.

What you need to know is that short and long are tools used with derivatives such as CFDs, futures contracts, and some other instruments. Not all instruments allow shorting, so it’s important to check whether the instrument you’re trading permits Short positions.

Once you understand Long and Short orders, you can plan your trades better and learn how to profit from market volatility in both directions.