Going long and short are common behaviors in the financial market. They can generally be seen in the stock market, futures market, foreign exchange market, and gold market. So what does long and short mean? How to determine the signals for long and short?

What does it mean to be long?

Being long means being optimistic about the future market conditions of stocks, foreign exchange, and futures markets and buying and holding to wait for profits to rise. Investors are optimistic about the future market and buy at the current price, wait for it to rise, and then sell after it rises to earn the interest rate difference between the two. That is, buy first and sell later. This method is the most commonly used in my country's current stock market. Profit method.

Being long can also be said to be long. The judgment of the market outlook is that it will be bought immediately after it rises. In foreign exchange, it is to buy a certain financial instrument because it believes that the price will rise, hoping that the price will rise at a high level in the future. The main characteristic of selling is to buy first and then sell. Usually in the market, you can only make a profit by going long in the band where the price rises.

What does it mean to be long or short? Short selling is the opposite of long selling. The specific operation is that because investors are not optimistic about the future of the market such as stocks or futures, they sell their chips at the current price and wait for the price to fall before buying again to earn the interest rate difference. Think of it as borrowing money and selling it first, then buying it back after the price drops.

In the formal short-selling market, there is usually a third-party securities firm that provides a lending platform. This behavior is similar to credit trading. This model is different from long-selling. It mainly makes profits in the wave of falling prices. The same as going long, you still buy at low prices and sell at high prices, but the operating procedures are opposite.

Generally speaking, the role of short selling is common in hedging, financing and speculation.

Hedging: You can reduce his risk exposure by shorting risky assets.

Financing generally refers to the bond market. Short selling of bonds will be returned in the future, which can be regarded as a method of borrowing money.

Speculation means that as we mentioned above, if you are not optimistic about the future market, you will sell from a high position and buy from a low position to earn the price difference.

How to determine the long and short signals

Let’s look at the long signals first:

Long signal 1: Under the moving average, macd red shrinking column, it should It appears green but does not appear green, but the red column suddenly stretches. If the K-line stops above the moving average, buy and go long;

Buy signal 2: Below the moving average, the stock price reaches a new low, but macd does not hit a new low. A new low, the bottom deviates from the green shrinking column. Similarly, when the K-line station is above the moving average, buy and go long;

Long signal 3: Below the moving average, the macd green column is higher than before, and the stock price has not reached a new low. The green column shrinks, and the K-line is now above the moving average, which makes buying long.

The following is a short signal:

Short signal 1: On the moving average, the price has not reached a new low, but the macd red column is lower than before, the green column is higher than before, and the red column has shrunk. If the K-line falls below the moving average, sell short;

Short selling signal 2: macd green column shrinks, the red column is lower than before, it should be red but not red, and the green bamboo suddenly stretches , sell short when the K-line falls below the moving average;

Short selling signal 3: On the moving average, macd has not reached a new high, the stock price has reached a new high, red shrinking column, top divergence, the K-line has fallen below the moving average. It’s time to sell short.

Here the editor would also like to remind everyone that it is inaccurate to only use macd to judge short and long positions. You must also make judgments based on the K-line and trading volume.

As for what it means to be long and short, we will introduce it here. Thank you for paying attention to this article.