If you’ve just started trading and you’re confused about Long and Short orders, let me explain it to you, because these two terms are actually simpler than you think.

Simply put, a Long position means buying. A Short position means selling. But it’s not “normal” buying and selling. It’s trading derivatives, such as Forex, derivative contracts, or CFDs, which let you make a profit whether prices rise or fall.

When you open a Long position, it means you expect the price to go up. So you place a buy order, wait for the price to rise, and then sell to capture the price difference—for example, buy at 41 baht, and when the price rises to 42 baht, you close the position and make a profit of 1 baht. But if the price doesn’t rise as you expected and instead drops to 40 baht, you’ll incur a loss.

As for Short, it works the opposite way: you expect the price to fall, so you place a sell order first, then wait for the price to actually drop. After that, you buy back at a lower price. For example, sell at 41 baht, and when the price falls to 40 baht, you buy back and make a profit of 1 baht—opposite to Long.

Let me give a clear example. Suppose Tim hears that the company PEAR has improved its results, so he opens a Long position by buying 100 shares at 350 dollars, using 35,000 dollars. Later, the price rises to 400 dollars, and Tim sells, making a profit of 5,000 dollars.

On the other hand, Tim hears that the country supplying raw materials to the company ORANGE will suspend exports, so he expects the stock price to fall. He opens a Short position by borrowing and selling 100 shares at 350 dollars, receiving 35,000 dollars. When the price drops to 300 dollars, Tim buys back 100 shares using 30,000 dollars, closes the position, and makes a profit of 5,000 dollars.

The key point is that Short doesn’t require you to wait only for a bullish market to make a profit. You can also profit from a bearish market. This is one advantage of trading derivatives, because it gives you more flexibility.

But be careful: if you open a Long position and the price goes down, or open a Short position and the price goes up, you’ll lose money. Losses from incorrect predictions are not unusual. Most traders have experienced it. Once you understand Long and Short, try starting with a demo account first, so you can gain real experience without risking your money.