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Make sure the selected market is the intended one.
LONG VS SHORT
DIRECTION / EXPOSURE / RISK
Long vs short crypto positions.
Long and short describe the direction of market exposure. A long position generally benefits from rising prices, while a short position generally benefits from falling prices. Both can lose money, and leverage can magnify those losses.
LONGSHORTLEVERAGE RISK
CORE DIFFERENCE
Direction changes how price movement affects the position.
LONG
Exposure to rising prices.
UPRising market can help
A long position generally gains when the referenced market rises.
DOWNFalling market can hurt
Losses grow as price moves against the long position.
RISKLeverage increases sensitivity
Leveraged longs can be liquidated during adverse moves.
SHORT
Exposure to falling prices.
DOWNFalling market can help
A short position generally gains when the referenced market falls.
UPRising market can hurt
Losses grow when price rises against the short.
RISKUpside moves can be violent
Short squeezes and rapid rallies can create fast losses.
BEFORE ENTRY
Direction is only one part of the trade.
Traders also need to review position size, leverage, collateral, funding, order type and liquidation information. A correct market direction does not guarantee a profitable result.
Confirm long or short
Direction errors can create immediate unwanted exposure.
Check total exposure
Position size should be reviewed together with collateral.
Understand amplification
Leverage magnifies both gains and losses.
Review holding costs
Funding can affect the net result while a perpetual position remains open.
Know how to close
Plan the exit workflow before entering the trade.
RELATED GUIDES
Learn the mechanics around direction.
LONG VS SHORT FAQ
Quick answers.
What does long mean?+
A long position generally benefits from rising prices and loses when prices fall.
What does short mean?+
A short position generally benefits from falling prices and loses when prices rise.
Can both directions be liquidated?+
Yes. Leveraged long and short positions can both be liquidated if margin requirements are no longer met.
TRADING DIRECTION
Open HOODBTC Trade ↗Know your side before sending the order.
Confirm market, direction, size and risk parameters before opening a position.