Giordano Salvatori, founder of STA · 16/10/2026 · 4 min read
Going long is the most natural move: you buy today at 100 and hope to sell higher. If the price reaches 110, you make 10 per unit; if it falls to 95, you lose 5. The maximum loss is everything you invested, if the price went to zero.
Going short is the opposite: you sell today at 100 and buy back later, hoping to pay less. If the price falls to 90, you make 10; if it rises to 110, you lose 10.
In crypto, going short is usually done with perpetual contracts: you don't need to own the coin, you open a contract that gains when the price falls. That is why a trading system can propose trades in both directions, and have something to do even when the market is falling.
In the markets the Bull is the one who believes in the rise, because the bull attacks by thrusting upwards; the Bear is the one who believes in the fall, because the bear strikes downwards. A «bull market» is a rising market, a «bear market» a falling one. The sculpture on the cover, a bear bringing down a bull, is from the 19th century: the rivalry is as old as the stock exchanges.
At STA this rivalry becomes a method: for every idea the Bull Researcher builds the case for and the Bear Researcher the case against, and only the ideas that survive the debate become cards.
| Long | Short | |
|---|---|---|
| You profit if the price | rises | falls |
| Maximum gain | unlimited | the entry price (if it went to zero) |
| Maximum loss | the capital invested | theoretically unlimited |
| Typical enemy | sudden crashes | violent rebounds (short squeeze) |
A short squeeze happens when many traders are short and the price starts to rise: shorts have to buy back to limit their losses, and those purchases push the price even higher. That is why a short without a stop is one of the most dangerous trades there is.
On perpetuals, longs and shorts exchange a payment every few hours, the funding. When almost everyone is long, longs pay shorts, and vice versa. Funding tells you how crowded a direction is, and it is one of the data points STA's Derivatives Analyst looks at before every card.
You have €1,000 and open a short on a €1,000 perpetual contract, with no extra leverage, entry at €50, stop at €52.50 and target at €45.
| Scenario | Result before costs | Indicative costs |
|---|---|---|
| The price falls to the target, €45 | +100 € | entry and exit fees, plus the funding for the days held |
| The price rises to the stop, €52.50 | −50 € | the same fees, with a market exit |
Funding can work for you or against you: if the market is full of longs, shorts collect it; if it is full of shorts, they pay it.
The same mechanism exists for US stocks, through perpetual contracts that track their price and trade even outside Wall Street hours. For a stock, though, the risk of jumps is higher: quarterly results or overnight news can move the price a lot in an instant.
Markets don't always go up. Those who can reason in both directions can stay put when there is no clear idea, instead of forcing a long in a falling market. That is why a good trading system proposes longs and shorts with the same seriousness, and explains each time why it chose that direction.
No direction is «better»: what matters is which way the market is going and how far it has already run. A trader who can only go long stands still, or loses, for all the months the market falls.
Every card as soon as it closes, with the result and what STA learned from it. It's free and you don't need to sign up.
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Try DEMO for free →This article is for information only and is not investment advice. Trading crypto-assets involves a high risk, including the total loss of the capital used. Numerical examples are for illustration.
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