Understanding the meaning of going long: the logic of buying low and selling high in leveraged trading

In leveraged trading, going long and going short are two opposite trading directions. Understanding what “going long” means is fundamental to trading. Simply put, going long means expecting the token price to rise, so you buy at a low price and aim to sell at a higher price to profit from the difference. Through leverage tools, you can control a larger trading position with a small amount of capital, thereby amplifying potential gains.

What Does Going Long Mean? A Trading Direction to Profit from Price Differences

The core of going long is bullish outlook. When you go long on a trading pair, you believe its price will increase. In leveraged trading, you can borrow USDT to buy more tokens. For example, with only 10,000 USDT of capital, you can borrow 40,000 USDT with 5x leverage, controlling a total of 50,000 USDT worth of the asset.

This logic is straightforward:

• Buy at a low price (open position)
• Wait for the price to rise
• Sell at a high price (close position)
• Subtract the borrowed principal and interest from the sale proceeds; the remaining is your profit

The advantage of going long is that you can position yourself early in assets you believe will perform well. If you are optimistic about BTC’s future, you don’t need to own a full 1 BTC; leverage allows you to participate in larger-scale trades.

Practical Example: Going Long BTC with 5x Leverage

Suppose an investor expects BTC’s price to rise. The trading parameters are set as follows:

• Trading pair: BTC/USDT
• Current price: 50,000 USDT per BTC
• Leverage: 5x
• Available balance in spot account: 10,000 USDT

After submitting a long order, the system automatically borrows 40,000 USDT, combining it with your 10,000 USDT to buy 1 BTC at 50,000 USDT.

After 48 hours, the situation changes:

BTC price rises to 52,000 USDT. The investor decides to close the position, selling the 1 BTC they hold for 52,000 USDT. After repaying the borrowed 40,000 USDT, the net profit is 2,000 USDT.

Calculation: Profit = (52,000 − 50,000) × 1 = 2,000 USDT

In this trade, the investor put in 10,000 USDT of capital and earned 2,000 USDT profit through going long, which is a 20% return. This illustrates the practical application of going long.

Comparing Going Short: Profiting from Price Declines

Opposite to going long, going short involves expecting the price to fall. By borrowing the asset at a high price and selling it, then buying it back at a lower price, you can profit from the difference.

Example: An investor expects BTC to decline. Using 5x leverage with a 10,000 USDT balance, they want to short 0.8 BTC at 50,000 USDT. The system automatically borrows 0.5 BTC, and combined with their own 0.3 BTC, they sell 0.8 BTC at 50,000 USDT.

After 48 hours, BTC drops to 48,000 USDT. The investor buys back 0.8 BTC at 48,000 USDT, costing 38,400 USDT, then repays the borrowed amount. The net profit is 50,000 − 38,400 = 11,600 USDT. After deducting the initial 10,000 USDT, the profit is 1,600 USDT.

The key difference between going long and going short is the direction: going long profits from upward price movement, going short from downward movement. Choosing the correct direction is essential to profit in leveraged trading.

Important Reminder: The above calculations do not include trading fees and borrowing interest. In actual trading, these costs will affect the final profit. While going long is straightforward, it’s important to carefully assess market risks and personal risk tolerance before operating.