Recently, many beginners have been struggling with contract trading, mainly because they don't understand the basic concepts of opening positions, closing positions, and holding positions. To be honest, these three terms seem complicated, but once you understand them, they are very simple. Today, I will break them down and explain.

Opening a position is actually the process of entering the market to establish a position. When you believe a certain coin will go up, you buy to establish a long position, which is called opening a long position. Conversely, if you think it will fall, you can sell to establish a short position, which is called opening a short position. When opening a position, you need to pay margin, which is the capital you use to bear potential losses.

Closing a position is when you decide to exit the market. Suppose you previously opened a long position; when the price reaches your target or you want to cut losses, you sell to close the position. If it's a short position, then you buy to close. The purpose of closing is simply to lock in profits or stop losses. This is the most critical decision point in position closing operations.

Holding a position refers to the current state of your open position. You have already opened a position but haven't closed it yet. During this period, you are holding the position. Your profit or loss depends entirely on the price fluctuations of the coin, which is why you need to constantly pay attention to market conditions.

As for calculations, it's actually not difficult. The cost of opening a position is the opening price multiplied by the amount you traded. The calculation of profit or loss when closing depends on your position direction. If it's a long position, the profit or loss is (current price minus opening price) multiplied by the trading amount. For a short position, it's the opposite: (opening price minus current price) multiplied by the trading amount. The calculation logic for holding profit or loss is the same as closing, except you haven't actually closed the position yet.

My advice is that beginners should first understand these three concepts clearly when starting trading, and then decide the timing of closing positions based on their risk tolerance. Don't be swayed by market sentiment to operate recklessly; controlling risk is always the top priority. You can keep an eye on promising coins, but be sure to think through your exit plan before entering.