Long, short, stop loss and target
Click an underlined word to see what it means.
With the bike you could only make money if the price went up. On an exchange you can make money in both directions.
Long: betting it goes up
A is just like the bike: buy now, sell when it's more expensive. If the price falls, you lose.
Short: betting it goes down
A sounds strange: you first sell something you don't have and buy it back later. With futures this is completely normal, one click. If the price falls, you make money. If it rises, you lose.
Stop loss: your seat belt
A is the price where you say: “If it gets here, I was wrong, I'm out.” The broker closes the trade on its own, even if you're asleep or staring at the chart in panic.
A trade without a stop is like driving without brakes. It can go fine for a long time, but one bad day takes everything.
Target: where I take the profit
The is the price where you close the trade in profit. A good trade has a target at least as far away as the stop, ideally twice as far. Example:
- Entry: 20,000
- Stop: 19,980 (risk of 20 points)
- Target: 20,040 (possible profit of 40 points)
This is called a risk : reward ratio of 1 : 2. Even if you're right in only half of your trades, you end up in profit.
✅ Quick check
You think the price will fall. What do you do?
Education, not financial advice. Trading futures is risky and you can lose more than you put in.