If you’re starting cryptocurrency trading, the first basics you should understand are long and short positions. Simply put, a crypto long is when you buy and hold with the expectation that the price will go up, but in real trading, it isn’t that simple.

What I first realized is that in a 24/7 crypto market, there are opportunities and risks that are completely different from traditional stock markets. Regulatory news, global events, technological progress, and overall market sentiment all intertwine and determine prices. It’s not uncommon for one event to shake the entire market, such as the collapse of major exchanges like FTX, the listing of spot cryptocurrency ETFs, or mentions of Bitcoin by presidential candidates.

So, what strategy is a crypto long? Basically, you buy Bitcoin at $60,000 and wait for it to rise to $65,000. You believe the price will go up, and you aim to capture profit over time. That’s the most basic reason for trading. On the other hand, short selling is the reverse approach: you borrow cryptocurrency from a broker, sell it at the current price, and then buy it back to return it once the price drops, pocketing the difference as profit.

The relationship between supply and demand is also important. If a particular cryptocurrency is scarce, its price is more likely to rise; if there’s excess supply, it’s more likely to fall. However, simply going long on crypto isn’t enough to succeed. You need to carefully analyze the underlying technology, market trends, and historical data.

When you actually start trading, the typical flow is to first choose a trustworthy exchange, set up your account, and protect it with two-factor authentication. Next, deposit fiat currency or another cryptocurrency to place a buy order. You hold your position while monitoring the market and decide when to take profits. For short selling, you borrow the cryptocurrency, sell it, and then follow the process of buying it back and returning it after the price drops.

Using margin trading can help you expand your investment, but it also increases risk at the same time. For example, if you borrow an additional $5,000 on top of your $2,000 and short $7,000 worth of BTC, then if the price drops from $10,000 to $8,000, you make a $1,400 profit. But if the price instead rises to $12,000, you would incur an equivalent loss.

Strategies used by experienced traders include leveraged positions, futures trading, hedging, and options trading. The same principles apply to meme coins and altcoins, but you still need to consider each asset’s characteristics and market dynamics. Techniques like trend following, offsetting, and arbitrage are required to read the market’s quirks.

A crypto long is a strategy that leverages positive market sentiment, but the risk is correspondingly greater. If the price falls contrary to expectations, you’ll incur losses, and if you use leverage, you could potentially lose your entire investment. Since your funds are tied up, you may also miss other opportunities.

On the other hand, the risk of a short position is unlimited loss. Because you can’t predict how high the price might rise, if unexpected positive news comes out, the losses keep growing. Margin calls and additional costs can also occur, and it becomes harder to respond to sudden market movements.

In the end, while a crypto long may look simple, it’s important to understand the market’s complexity and the specific traits of each individual asset—and to invest only the amount of money you can afford to lose. With thorough research and an understanding of market trends, you’ll be able to make smarter decisions while balancing potential gains against inherent risks.