I just realized that many new people entering crypto are still confused about basic concepts. Today I want to share about one of the most important terms that every trader needs to understand: what is a long short order and how it affects our trading psychology.

First, we need to understand the concept of Position. Simply put, a position is your stance or holding status in the market. I will buy or sell a certain currency pair depending on my prediction. There are two main types of positions: long position and short position. When you open a long position, you are buying with the hope that the price will go up. Conversely, a short position is when you sell short, predicting the price will decrease.

Let's clarify Long first. Long – also called Buy – is when you buy a cryptocurrency pair expecting to sell it at a higher price. Your profit comes from the market’s price increase. When you believe the price is about to rise, the first step is to buy. But I usually don’t put all my money in at once. Instead, I split it into multiple entries at different levels – this is called averaging in. When the price actually goes up, I take profit on my long positions. For example, if you buy EUR/USD, you are buying EUR and selling USD.

Now, let’s talk about Short – the opposite of Long. Short is when you sell a currency pair expecting it to decrease in value. Profit comes from the decline. When you predict the price will fall, you place a sell order for that pair, but you don’t actually own it. To do this, you need to use leverage and margin. When the price indeed drops, you close your short position with a profit. With EUR/USD, short selling means you are selling EUR and buying USD.

The most interesting part is the trader’s psychology when long and short orders move. If everyone has the same prediction – for example, everyone believes the price will rise – they will all rush to buy. When the number of long positions becomes too large at once, the price can spike rapidly in a very short time. The same happens with short – if everyone is shorting, the market can plummet uncontrollably. That’s why crowd psychology is so important in trading.

I want to emphasize that long and short positions are always closely related to speculation activities. Therefore, you must understand this well and always set stop loss for each trade to avoid unnecessary losses. When you open a buy or sell order, you start trading. It ends when you close the buy or sell position. All profits and losses are only on paper until you actually close the trade.

In summary, understanding what long and short orders are and how they work is the foundation to becoming a better trader. If you’re just starting out, take the time to learn these concepts thoroughly before putting real money into the market.