Going long: betting on a rise
Going long means buying with the expectation that price will rise — you profit from the gain between entry and exit. It’s the familiar “buy low, sell high”.
On spot, your downside is bounded: the worst case is the asset going to zero. With leverage, that changes — a long can be liquidated well before zero if price falls far enough to consume your margin.
Going short: betting on a fall
Going short means profiting when price falls. Mechanically you’re selling something you don’t own — borrowed via margin, or synthetically through a perpetual futures contract — and buying it back lower.
Shorting is essential for two-way trading, but its risk profile is different: a short’s loss grows as price rises, and price can rise without an upper bound. Disciplined stops matter even more on the short side.
The risks that apply to both
Two forces hit leveraged positions on either side:
- Liquidation: if the move against you consumes your margin, the position is force-closed. Higher leverage means a closer liquidation price.
- Funding: on perpetuals, you pay or receive funding at intervals depending on which side is crowded — a recurring cost or income on held positions.
Whether you’re long or short, size from your stop-loss, confirm your liquidation price before entering, and check funding if you plan to hold.