If you're just starting in crypto, you're definitely going to hear about Long and Short. Today, I want to share some basic information about what long and short orders are and the psychology of investors as these orders fluctuate.

First, let's talk about the concept of Position. Simply put, it refers to the state of holding a certain amount of currency under specific market conditions. In crypto, a Position directly relates to buying or selling currency pairs. There are two main types: long (Long Position) and short (Short Position). A Long Position is when you buy with the hope that the price will go up to make a profit. Conversely, a Short Position is when you sell short with the expectation that the price will decrease.

To explain Long more specifically. Long is when a trader buys a cryptocurrency pair expecting to sell it later at a higher price. When you believe the price is about to rise, the first step is to buy. However, you don't always get the best price, so most people split their funds to buy at different levels. Then, when the price actually increases, you take profit from your previous Long orders and realize gains. For example, buying EUR/USD means you buy EUR and sell USD.

Short is the opposite. It’s when a trader sells a currency short, predicting it will decrease in value. When you anticipate a price drop, you place a sell order for a currency pair you believe will fall in the future. But since you don’t own the currency, you need to use leverage and margin accounts to short sell. When the price indeed drops, you close the Short order and make a profit. Selling EUR/USD means selling EUR and buying USD.

Now, the interesting part is the investor psychology. If everyone shares the same view—for example, everyone believes the price will rise and opens Long positions simultaneously—the excessive Long orders can cause the price to spike rapidly in a short period. Similarly, if everyone opens Short positions because they think the price will fall, the large amount of short selling can cause the price to plummet. That’s why understanding what long and short orders are and risk management are very important.

Long and Short positions are closely related to speculation. Therefore, you need to understand them well and always set stop-losses for each trade to avoid unnecessary losses. When you open a trade, you perform a buy or sell action. The trade ends when you close the position. All buy and sell values are converted and calculated for profit or loss based on the account currency. As long as you haven't closed the trade, all gains and losses are only on paper.

Understanding Long and Short will help you trade smarter. I hope this sharing is helpful for those new to crypto. If you find it useful, share it with your friends!