I just realized that quite a lot of new people coming into crypto or stock trading are confusing normal buying and selling with Long/Short positions. These are completely different concepts, and if you don’t understand them clearly, you’ll run into trouble.

At its simplest, a Long order is when you expect the price to go up, so you buy. Conversely, a Short order is when you believe the price will fall—you “borrow” assets from the exchange to sell at a high price, then buy them back at a lower price. Both can generate profits, but the risks are completely different.

What most people overlook is leverage (Leverage). This is the “key” to Long/Short positions. If you have 1,000 USD and use 1:10 leverage, you can open a position worth 10,000 USD. If the price moves in the right direction by 10%, you earn 1,000 USD in profit (doubling your account). But if the price moves against you, you can lose your entire initial 1,000 USD in an instant. This is called “cháy tài khoản” or Margin Call.

I once had a friend who traded crypto with 1:50 leverage. He made 200% profit in 2 weeks, but then a Short position was suddenly squeezed (Short Squeeze)—the price surged dramatically, and he lost everything. The 2021 GameStop event is a classic example of how a Short Squeeze can wipe out billions of dollars from hedge funds.

That’s why professional investors use Long and Short not for speculation, but for risk hedging (Hedging). For example, if you hold 1,000 Apple shares long-term but worry the market could crash in the short term, you can open a Short position on the S&P 500 index. Then, the profit from the Short trade can offset the losses in your underlying portfolio, helping you feel more secure.

From a strategy standpoint, use Long orders when you see positive signals: good economic news, and technical indicators such as MACD or RSI showing an uptrend, or candlestick patterns like piercing lines. On the other hand, Short orders fit when inflation is high, central banks tighten monetary policy, or you see a double top pattern on the chart.

But the most important thing you need to remember is this: both Long and Short carry high risks. A Long position can lose up to 100% (when the price drops to 0), but a Short position has potentially infinite loss risk because the price can rise without limit. If you don’t know how to manage risk, don’t trade Shorts. It’s that simple.

Exchanges like Mitrade or other crypto platforms all allow you to place take-profit and stop-loss orders automatically, which is very important. When you open a Long or Short position, always set your stop loss first. That’s the first step to protect yourself.

One more thing: if you hold the position overnight, you have to pay a swap fee (Overnight fee). For long-term trading, this fee can significantly erode your profits. So calculate carefully before deciding.

In summary, Long/Short positions are a powerful tool, but they’re a double-edged sword. If you’re a beginner, learn thoroughly, try it with a demo account first, and always manage your risk. Don’t let greed destroy everything you’ve built.