In the digital currency market, we often hear words such as long and short, long and short, especially in some market analysis articles.

Some friends who are new to the currency circle don’t know what this means and what it represents. Here I will explain it in detail and give examples. I hope it will be helpful to you!

1. Look long and do long:

Bullish: Bullish on market conditions.

Long: All buying behavior in the spot market is long. Any behavior that increases value by buying low and selling high and relying on price increases is a long behavior.

Regarding long positions: This refers to investors who are optimistic about the currency market and predict that the currency price will rise. They buy a certain amount of digital currency at the current price and sell it at a high price after the price rises, thereby earning profits from the price difference. They buy first and sell later. trading behavior.

In fact, bulls and shorts are not specific individuals or institutions, but generally refer to a group of people with similar aspirations and the same expectations.

Example: What is bullish and long-selling? For example, there is a currency with a current price of ten yuan. You buy this currency for ten yuan. When the price of this currency rises to fifteen yuan, you sell it. , making a profit of five yuan, then this behavior is called going long.

All of our buying actions are based on spot trading.

2. Be short, short:

Bearish: Believing that the market will fall.

Short Selling: The act of selling after a bearish view on the market. If you can't do it in the spot market, you can go short through futures and leverage trading.

Regarding short positions: Investors believe that although the current currency price is high, they are negative about the future of the currency market and expect that the currency price will fall. They sell the digital currency in their hands at the current price and then buy it after the market drops to obtain the price difference. profit. Its characteristic is the trading behavior of selling first and then buying.

For example; what is the process of short selling?

For example, the current price is ten yuan per coin. At this time, you think its price will fall in the future, but you don’t have ten yuan in hand now. You only have three yuan or two yuan. You don’t have enough to buy a coin. What you have is I mortgaged my 2 yuan, borrowed one coin from a third party, and put down a deposit of 2 yuan. After borrowing this currency, you immediately liquidate it and sell it on the market, and you will hold ten yuan in cash. However, this ten yuan in cash cannot be withdrawn directly because you have not paid back the third currency. One coin for three parties. Then this act of borrowing and selling it directly after borrowing becomes the beginning of short selling.

When the price falls as expected, for example, to five yuan a piece, you hold ten yuan in cash, and you use five yuan to buy a coin and return it to the third party who lent you the coin at that time. For example, exchanges. After repaying it, you will owe nothing to each other, and what is left is your profit. If you don't count the third party's interest, it is a profit of five yuan. This is a profitable process of short selling.

But if the price you shorted at this time does not fall as expected but rises instead, your margin will suffer losses. Once the loss exceeds the amount that the margin can bear, it is called liquidation. The principal is gone.

The above is a detailed explanation of long and short positions, long and short positions, and long and short positions.

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