Long Definition
In cryptocurrency trading, to be ‘long’ refers to a viewpoint that a particular cryptocurrency will rise in value, prompting the trader to buy the asset with the intention to sell at a later date for profit. It is a position traders or investors adopt, thus indicating optimism towards an asset’s performance on the part of the investor.
Long Key Points
- A long position signifies an investor’s confidence that an asset’s price will rise.
- Traders who ‘go long’ buy an asset with the intention of selling it later at a higher price.
- ‘Long’ is used in contrast with ‘short’, which involves betting on price decline.
What does Long mean?
The term ‘long’ originates from traditional finance, which refers to an investing strategy where a trader or investor buys assets with the expectation that their price will increase over a given period. In the context of the blockchain and cryptocurrency, this expects the value of a specific cryptocurrency to overwhelm its current market value, prompting a purchase of the asset.
Who Uses the Long Strategy?
The long strategy is employed by various traders, both in the traditional financial markets and the cryptosphere. These can range from day traders, who tend to buy and hold an investment for a short period, to long-term investment enthusiasts who believe in the future prospects of a particular cryptocurrency.
Where does the term Long come from?
The term ‘long’ is derived from traditional finance markets and has been transposed into cryptocurrency trading and other derivatives markets. The expression is used to convey the belief that good times, or bullish trends, are expected to last for a sustained period.
Why use Long?
Investors opt for a ‘long’ investment when they anticipate a rise in the asset’s price. Some crypto traders turn ‘long’, assuming the blockchain technology’s potential and the specific cryptocurrency they invest in will eventually yield a favorable return.
How to use Long in Trading?
In trading, going long involves buying a cryptocurrency, holding onto it, and selling it when its value increases. Traders should have a strong comprehension of the market and the specific parameters of the cryptocurrency in which they plan to go long. Willingness to accept the potential risk, given that market volatility may result in losses, is a crucial component of pursuing this strategy.
