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What is a Long Position In Crypto?
An investor, who thinks that the value of a security, financial instrument or good will increase, takes a long position when he buys the relevant instrument. In a long position, when the price of the relevant instrument rises, the investor makes a profit.
What is Long in the Cryptocurrency Market?
It is possible to earn profits from future transactions with coins traded on cryptocurrency exchanges. In the future, the terms short and long are frequently heard terms. These terms, which appear in the crypto money market, are also used in all investment platforms under normal conditions. In this article, we will talk about the details of the long word used in cryptocurrency exchanges. The long position, which means long, is used for investment purposes in the futures section of the cryptocurrency market. Expressing an opinion that the preferred cryptocurrency from the futures section will gain value is known as a long position. However, if the crypto money invested in futures gains in value, the investor will make a profit at a certain rate. It is possible to close the position at any time by opening a long position from future transactions. However, the best time to close a long position is when the value of the cryptocurrency that opens a long position increases. The investor who opens a long position will make a loss if he closes the position when the coin he invested in falls. The amount of this loss can be high or low depending on the leverage ratio. There is also the case of liquidity in future transactions. So what does it mean to be liquid? Being liquid is the level determined depending on the leverage ratio, based on opening a long or short position in the future. If the invested coin reaches this level, the investor becomes liquid and all his capital is reset. The worst-case scenario in the future is to be liquid.
How to Make a Long Position in Stock Exchanges?
Although there are different ways to open long positions in cryptocurrency exchanges, long positions in all cryptocurrency exchanges are based on the same logic. To open a long position in futures, the trading volume must be selected first. Then the leverage ratio is preferred and it should not be forgotten that as the leverage ratio increases, the risk and the gain will increase in parallel with each other. Then the price at which the long position will be opened is entered. Thus, a long position is opened and the value of the cryptocurrency in which the position is opened is expected to rise. If the price rises, the position is closed at the desired point.
When Should a Long Position Be Opened?
After knowing about opening a long position in the futures section in the crypto money market, let's answer the question of when to open a long position. Opening a long position poses a risk, so it is extremely important to have sufficient information. If you open a long position in the future without knowing it, you will likely experience high losses. To open a long position, first of all, the market analysis should be done and it should be taken into account whether there is a buying pressure. If the expected direction is upwards, it is quite reasonable to open a long position again. If the aforementioned expectation is progressing in harmony with technical analysis, opening a long position can allow huge gains to be made. You can have detailed information by following all the news about the crypto money market closely. Futures trading with leverage determines the extent of risk. In other words, it is recommended that investors who open long positions stay away from high leverage. The reason for this is that the long position opened with high leverage makes the liquidity level based on high risk. The leverage rate that experts recommend in futures is between 1X and 10X. If the long position is opened with a low leverage ratio, the instantaneous decreases will not be such as to make the investor panic and will not make the investor feel the liquidity danger. In this way, it will be expected that the price of crypto money will enter an upward trend again.
What are the Points to Consider When Opening a long position?
As it is known, a long position is a type of future transaction. There is always risk in future transactions. To minimize this risk, leverage should not be excessively high. Even if low leverage yields low profits, at least the liquidity of the investor will be minimized. The most important thing when opening a long position is undoubtedly to choose the leverage as a maximum of 10X. Because the high leverage will increase the profit to be obtained, but it will cause the risk of being liquid in a short time and resetting all the capital. However, it is very important to wait while opening a long position in the future. The thing to do is to wait when the trade is opened with leverage that will minimize the price to become liquid. Thus, it will be possible for the investor to obtain the desired earnings.