What is empty speculation in currency speculation?

"Short" in currency speculation is a speculative strategy that predicts the decline in cryptocurrency prices and makes profits by borrowing, selling, and then buying back cryptocurrency. Short order steps: 1. Borrow the cryptocurrency you do not hold; 2. Sell the borrowed cryptocurrency; 3. Buy back the cryptocurrency at a lower price. The principle of short order: buy back the borrowed cryptocurrency after the price drops, and obtain the profit from the difference between selling and buying back. However, short orders also involve risks such as price increases, liquidation, and interest charges. Short orders are suitable for predicting a bearish market, hedging risks, arbitrage, etc. When conducting short trades, you need to pay attention to researching the market, setting stop losses, and managing funds.

#What does short mean in currency speculation?

In cryptocurrency trading, "shorting" is a speculative strategy in which a trader predicts that the price of a specific cryptocurrency will fall.

How to place a short order?

To place a short trade, traders need to:

• Borrow cryptocurrencies they do not hold.
• Sell borrowed cryptocurrencies instantly and earn profits at current market prices.
• Buy back the cryptocurrency later at a lower price.

The Principle of Short Orders

The principle of short orders is that if the price of a cryptocurrency falls, traders can buy back what they borrowed at a lower price of cryptocurrency. From the difference between selling the borrowed cryptocurrency and buying it back, the trader will make a profit.

Risk of short order

However, there are also risks of short order:

• Price increase:If encryption The price of the currency increases, and short sellers will be forced to buy back the cryptocurrency at a higher price, thereby incurring losses.
• Liquidation: If the price of a cryptocurrency fluctuates violently, the exchange may force the liquidation of short orders, causing traders to suffer heavy losses.
• Interest Fees: Traders are required to pay interest on borrowed cryptocurrencies, which reduces potential profits.

Applicability of short orders

Short orders are usually used in the following situations:

• Prediction that the market will be bearish, that is, the price will fall .
• Hedging the risk of other cryptocurrency holdings.
• Take advantage of price fluctuations for arbitrage.

Notes

When conducting short trades, you should keep the following in mind:

• Thoroughly study market trends and risks.
• Set stop-loss orders to limit potential losses.
• Manage funds well and avoid excessive leverage.

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