Long Vs Short

How money is made in trading?

When a buyer accepts the ask price or a seller accepts the bid price, a trade transaction happens. If buyers exceed sellers, they may be inclined to increase their bids to get the stock. As a result, sellers will charge higher prices for it, driving up the price.

If there are more sellers than buyers, sellers may be willing to accept lesser offers for the stock, while buyers may likewise drop their bids, ultimately pushing the price down.

Money is made two ways in trading:
  1. Going Long
  2. Going Short


This is when you expect a stock to appreciate in value, meaning you will go long, also knowing as buying. To keep simple, going long or buying means you want the stock to go up (First buy low and then sell at high).

Long Position
Long Position


This means you are selling a stock also known as shorting. To keep things simple, shorting a currency pair means you want it to fall in value (First sell high and then buy at low).

Short Position
Short Position

Trading System

All successful traders use a trading system. A trading system prevent you to trade based on your emotion ( i.e fear, greed ). Components of a trading system that you should know as a trader before entering in the market :

Market What to trade (buy or sell)?
Entries When to trade (buy or sell)?
Stops When to get out of a losing position?
Exits When to get out of a winning position?
Position Sizing Quantity to trade (buy or sell)
Tactics How to buy or sell?

If you have a proper trading system, and you follow it with loyalty, then you will be profitable in long run. Don't look for a perfect trading system as it's doesn't exits.

The system will only help you survive the emotional struggles and as you know trading is the game of optimism, thrill, fear, greed, panic etc.

Keep in mind that a stop order does not ensure that it will be executed at or near the stop price. Always keep your eyes on open position
Next In Line