It's obvious how money is made when the price goes up, you buy cheap, sell when the price goes up, and the difference is your profit.

Short selling also works in a similar manner, the difference is that you borrow a coin, sell it immediately, wait for the price to go down, buy back what you borrowed, and giving it back. The difference is your profit.

Example:

  • You borrow 1 $BTC from #Binance

  • Sell it immediately for $105,000

  • You buy back 1 $BTC when price goes down to $100,000 and return it to Binance

In this case, you sold it for $105,000 and bought it back at $100,000, which means you make a profit of $5,000

#short #ShortSelling #TradeLessons