Orders and the clock

Long and short

Long means you benefit if the price rises. Short means you benefit if it falls. Neither one is a recommendation.

Lesson 2 of 4 • 9 min

A chart that can be read upward or downward — Example. Bought at 1.1000, a rise to 1.1040 is a gain and a fall to 1.0980 is a loss. Sold at 1.1000, those two results swap. Both directions can lose.

Study material only. It is not a signal to buy or sell. AcademyTrade is education. It is not a broker, not investment advice, and not a promise that you will make money. Trading can lose the money you deposit.

A long position gains if you can sell later at a higher price than you paid. A short position gains if you can buy back later at a lower price than you sold.

Both can lose. A long loses when the price falls through the place you said the idea was wrong. A short loses when the price rises through that place. The direction does not make one of them safer.

Shorting also has a borrow, a fee, or a contract behind it, depending on the market. If you cannot explain how the short is constructed, you are not ready to practice it. Read the contract note, or stay with the long side until you can.

Direction is a description, not a personality. People who call themselves bulls or bears are still looking at a bid and an ask.

Name the direction in the journal: long or short.
Name the price where that direction is wrong.
If you cannot explain the short, do not practice it yet.