Long vs Short: how to profit from any trend

robot
Abstract generation in progress

In crypto trading, there are two main directions of play — and both are equally profitable if done correctly.

Short: play for a decline

Imagine, you are sure that BTC will drop. Here’s what you do:

  1. Borrow BTC on the exchange
  2. You immediately sell it at the current price.
  3. Waiting for the price to drop
  4. You buy it cheaper
  5. You repay the debt, take the rest as profit.

In December, BTC was at 43K, you opened a short. In January it fell to 40K — you closed. Profit: 3K on each contract.

Long: play for growth

This is a strategy for optimists:

  1. You buy an asset at a lower price
  2. Waiting for it to appreciate
  3. You sell at a higher price
  4. The difference is your profit

XRP was at $2.5, you bought. In a month it rose to $3.2 — sold. Profit: 28% in a month.

When to use what?

  • Long → upward trend, positive news, increasing volumes
  • Short → falling market, leg, technical signals for reversal down

Both work on stocks, crypto, futures - the main thing is to have a liquid market. Just choose the direction that fits the current scenario.

BTC1,83%
XRP7,42%
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
0/400
No comments
  • Pin

Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate App
Community
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)