When we start trading we all select what is best for us. We are looking for the best broker, the best strategy, the best trading signals and the best information resource. We also need to select whether we are going to go short or long.
And this decision is pretty important.
We need to settle our primary goal and figure out whether we have a lot of patience for long trades or have a lot of energy for executing several short ones.
So. What are the perks of short and long trading?
First we are going to take on short trading.
1. Wider choice.
2. More options for profiting.
3. It minimizes the risks.
4. It offers more protective tools.
5. It doesn’t limit other trading options.
1. Wider choice.
Short trading gives traders access to a wider variety of assets. It is unusual and unknown to some, but long trading actually limits your choice of trading assets and doesn’t give you as broad of a choice as shorting.
With short trading those who want to gain profits from decrease in the price for assets can do so without having to own the asset. Isn’t that neat?
2. More options for profiting.
We already greased topics of gaining profits even when the market is going lower. It is ONLY possible with short trading. I thought that that is worth mentioning. Going short gives you the possibility to open a selling position on a failing assets and see your profit go up.
Isn’t that neat?
3. It minimizes the risks.
Imagine that you own a barrel of oil. And suddenly and unexpectedly the prices for oil drop so low that there is no doubt – they are never going to recover to the level at which you have bought it. And you are left with no gain and even with a loss.
Well, that is never going to happen to you if you are shorting.
Short trading saves you from all the jumps and fluctuations of the price. And that is exactly what we as traders should strive for.
4. It offers more protective tools.
Short trading offers more protective and trading tools. While there is no point in using stop loss and take profits in long trading – they were simply NOT designed for that, they serve a great purpose to us in short trades.
This means that you can put some of the responsibility on the machine and let it do its work. Look at it this way – you got your machine-generated trading signal, you put in all of the numbers that you got and from now on none of the trade depends on you. Machines have done all the work.
Why? Because short trading allows the usage of these protective tools.
5. It doesn’t limit other trading options.
Just like in long trading short trading allows leverage trading, and larger-than-capital open positions. It doesn’t limit your options and can be enjoyed by those who prefer this type of trading.
And so, these are the main perks of short trading. swoon we are going to look at long trading as well!
