$ADA 📉 What is a "short"?

It’s when you sell coins that you don’t have at a high price and then buy them back cheaper to return.

🔁 Example:

I shorted 250 coins at a price of $1.00 — as if I sold them for $250.

The price dropped to $0.80 → I bought back 250 coins for $200.

Difference: $50 — that’s my profit.

💡 What actually happens:

The exchange essentially lends you the coins.

You sell them at the peak (if you guessed the level right).

Then, when the price drops, you buy them back cheaper and pay back the loan.

Everything that’s left is your profit.

❗ If the price goes up — you lose:

Shorting is the opposite logic.

If the price goes up instead of down — you have to buy back the coins at a higher price than you sold → loss.

Example:

I shorted at $1.00, the price rose to $1.10.

You buy back 250 coins for $275.

Lost $25.

🔐 My main mistake before:

I didn’t know how I was making money. I just "went short" based on intuition. And then I got frustrated: "why did I lose?"

When I understood the mechanics, the puzzle came together. I started to see where the market maker enters, and who is actually buying coins from me at the moment of shorting.