Short Selling in Crypto

Short selling allows traders to profit from falling prices. You borrow an asset at a high price, sell it, and aim to buy it back at a lower price.

Steps:

1. Borrow the asset from the exchange
2. Sell at current market price
3. Buy back after price drops
4. Return asset and pocket the difference

When to short:

• During confirmed downtrends
• When negative news or events impact the asset
• When resistance levels are repeatedly rejecting price movement

Risks of shorting:

• Potential loss is unlimited (if price rises indefinitely)
• Requires precise timing and strong risk control

Shorting should be reserved for advanced traders who understand both the market and risk mitigation.