One of the biggest advantages of trading on PrimeXBT is that a trader can profit from both rising and falling markets. With the market in the downtrend ever since the start of 2018, most people started to be more conservative when it comes to trading cryptocurrencies. However, that is mostly due to the lack of knowledge of how short selling works and what it is exactly.

What is short selling?

Short selling, or shorting, is a way to profit from the downwards trending markets. It is a complex process of borrowing, selling, and rebuying at a lower price and returning the “debt”, therefore making a profit. Simply put, it is betting on a Cryptocurrency going down. Only a handful of trading platforms offer it, which further reduces the number of people knowing about it and using it.

When entering a short position, everything is reverse to the usual long (buy) position. One enters the position by selling, has a stop loss which is higher in price than the entry point, and a profit target which is lower than the price entered.

Short selling is a perfect way to profit during a bearish phase in the market, as upwards swings are short and miniscule in comparison to the downwards facing ones. Trading with the trend is considered a norm for making a consistent profit with trading any assets.

Which strategies work with short selling?

Strategies that work with buying, work with shorting as well. Each and every strategy used while buying a cryptocurrency can be used to profit from its downwards move.

Why would anyone short sell cryptocurrencies?

Cryptocurrencies have a great long-term potential and are considered the disruptor of almost every single field of business. There is no debate on how impactful Blockchain and cryptocurrencies will be in our future. However, traders are not investors. They do not invest in a cryptocurrency and leave their position for years and decades. Most traders in the cryptocurrency market enter and leave their position within a single day. This brings us to a conclusion that the only thing that matters for traders is the volatility that occurs within cryptocurrencies. They try to profit from upswings and downswings based on the analysis that they did. Short selling is a great tool and people should not have any reserves towards using it.

Leverage and short selling

As with any other form of trading, shorting benefits from using leverage. Traders do not need to track down only 10% or 20% moves in order to be profitable. By using leverage, they can enter the position with a miniscule amount of money and still have a great profit from even a 1% trade in their favor.

Benefits from using leverage

With trading platforms such as PrimeXBT, which offers 1:100 leverage, traders can short sell their desired cryptocurrency and have their potential profits multiplied by up to 100x!