Long and Short trading are really important if you want to profit from market volatility.

Talking about what short is, you also have to mention long. Both terms are used to indicate which direction you think the price will go. A Long Position means placing a buy order. Traders believe the price will go up, buy at a low price, and wait for the price to rise. They close the position by selling, making a profit from the price difference. For example, if we buy an asset at 41 baht and expect the price to rise to 42 baht and then sell, we make a 1 baht profit. The Short Position is the other side of the story.

What is short really? It’s placing a sell order first, not a buy. Traders think the price will fall, so they sell first and wait for the price to drop. Then they buy back at a lower price, making a profit from selling high and buying low. For example, if we sell at 41 baht, expecting the price to drop to 40 baht, we buy back at 40 baht and make a 1 baht profit.

What you need to remember is what short is. It’s not a tool that can be used for all types of assets. Mostly, it’s used with derivatives like CFDs and futures contracts, not regular stocks, because you need to borrow the stock from a broker first. But with CFDs, it’s much easier.

Here’s a real example: Suppose we think PEAR stock will go up. We buy 100 shares at 350 baht, costing 35,000 baht. Later, the price rises to 400 baht, and we sell, making a 5,000 baht profit—that’s a long.

But if we think ORANGE stock will go down because of news about export problems, we can place a short order at 350 baht, earning 35,000 baht. When the price drops to 300 baht, we buy back 100 shares for 30,000 baht, closing the position and making a 5,000 baht profit—that’s a short.

What’s clear is that short is a way to profit from falling prices. You don’t always have to wait for prices to go up. This allows traders to profit in both bullish and bearish markets.

But be careful. If you’re wrong—like buying long and the price drops, or shorting and the price rises—you will incur a loss. Therefore, understanding long and short well and managing risk properly are very important if you want to succeed in trading.