After half a year of trading, I reviewed Tony's King of Trading and had a new understanding. I knew that going long was twice as much as going short, but I didn't want to be trapped. It felt bad to be trapped, so I would be more confident to go short most of the time. But now I know that

Shorting is a profit deflation model

If you go long correctly, your profit is unlimited. The higher the price rises, the higher your profit will be. It only takes 50% to fall from 10 yuan to 5 yuan, but it takes 100% to rise from 5 yuan to 10 yuan, so it is twice the decline when it rises.

That is, if you go short correctly, even if the price keeps falling, the profit will continue to converge and eventually tend to an extreme value.

Let me give you an example: you go long with 100 yuan, there is no leverage in spot, the price rises from 1 yuan to 50 yuan, and you have 5,000 yuan in your hand. However, if you go short with 100 yuan, 1x leverage, the price falls from 50 yuan to 1 yuan, how much money do you have in your hand in the end? It is 198 yuan.

The difference between 5,000 yuan and 198 yuan is the difference between the income inflation model and the income deflation model.

Every time you short with 1x leverage, the limit of income is 100%.

Of course, some people will say that I can increase leverage, but with the same leverage multiple, longs still make more money. The short-selling income deflation model does not change due to leverage. $SOL $PEPE $BOME