Position: long and short

Long: expecting a rise

A long means you hold an asset or a contract whose value grows with the price. Saying "I am long BTC" means the position gains if BTC goes up. The simplest long is a coin bought on the spot market. Without leverage the largest possible loss is the whole amount invested, if price fell to zero.

Short: expecting a fall

A short gains when price falls. In crypto it is usually opened with perpetual futures or margin trading, where a borrowed coin is sold and later bought back. A short's risk is theoretically unlimited because price can rise without limit, and with leverage the position can be liquidated.

Stop and target in both directions

Example

A short opens at 100, with the stop above the entry at 104 and the target at 92. If price falls to 92, the position gains 8%. If it rises to 104, the stop closes it with a 4% loss. The risk to reward ratio is 1:2. For a long it is the mirror image: entry 100, stop 96, target 108.

Common mistakes

• Opening a short just because price "is too high". In a rising trend price can keep climbing for a long time.
• Getting the stop direction wrong: for a short the stop goes above the entry, not below.
• Flipping between long and short after every candle with no plan.
• Treating a short as something special. It is just a direction, and the risk is managed the same way: with a stop and position size.
• Forgetting that a futures short has extra costs: the funding rate and liquidation risk.

How to practise

For each historical chart, first decide: long, short or wait. Then write down the entry, the stop and the target, and only after that look at what happened. In the Skenuok app's daily scan you guess the direction before seeing the verdict ("Guess before the AI"), which builds the same habit. To start: How to start trading crypto.