LIVE๐๐ค Found that many investors choose to short $ETHFI. In this regard, my personal view is: Bull markets should always treat short selling with caution.
๐ Some people think that short selling can earn 50% profit from 100 to 50, and 80% profit from 50 to 10. The cumulative profit seems to exceed 100%. However, this is just a theoretical calculation. In fact, what you earn from short selling is the difference from the short selling price to the closing price, and the closing price cannot be negative, so the real profit will never exceed the principal. In contrast, the potential to go long is much greater. Once it is doubled, the return is 100%; if it is doubled ten times, the return is as high as 1000%. Obviously, the profit margin of going long at the bottom is much greater than the profit margin of going short at the top.
โ๐ What's more, shorting is extremely risky, and your losses can quickly expand once the market rebounds. In the currency circle, it is not uncommon for bookmakers to raise currency prices several times, dozens of times, or even more times. Faced with such a rise, can you withstand the risk of rising prices?
๐๐ผ After understanding this principle, you should realize that the profit margin of short selling is relatively small, and the error tolerance rate is very low. For investors who hold spot stocks for the long term, short-term price fluctuations may not be worth paying too much attention to. A sound investment strategy can often bring more impressive long-term returns.
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