Questions about conceptual understanding of long/short positions

TRADING AND TECHNICAL ANALYSIS
#1

Hi everyone,
I am completing the course on TA, and I have some questions about understanding long and short positions still. I understand that a long position, is one where we’d like to enter the market, and for the market to go up in value (by generating money through holding), and that in a short position, i understand that we’d like to exit the market, and sell at a certain point to make profit from avoiding loss. However, in trading view (but this also seems to be what happens just as people trade), why would there be a third level? For example:

long position: OPEN at price X, purchase when it dips to price Y. Why is there a top line that indicates another level to be reached for something to happen? (is that triggering a sell order??)

short position: OPEN at price X, sell when it jumps to price Y. Why is there a bottom line that indicates another level to be reached for something to happen? (is that triggering a buy order?)

essentially, from what I understood is that a L/S stop/limit/loss orders made one move in a sequential order of moves that a trader makes to turn a profit. In this model, it seems that two ‘moves’ are being made?

1 Like
#2

Hey @cryptcat, hope you are well.

Could you please share an screenshot or image that give us an example on the long/short position third level you are describing? I might be able to help you understand it but i cannot figure it out in my head yet :face_with_monocle:

Carlos Z

#3

haha sure! here, I have attached a screen shot with some writing. here is an example of a long position- i uderstabd at the middle line is the buy in line at which the trade will me open and executed and the red area is a zone in which the order will literally purchase the coin or token, but what happens if it trades at that third line? if i am entering a long position i want it to keep going up and up! thats why i used the terms “moves” because I’m thinking about if someone wanted to then sell what they purchased at that level…1618176298312

1 Like
#4

Ok, do you know the name for that chart? I mean which indicator/chart tool are you using for it? The name should have the definitions for the different levels. :nerd_face:

Carlos Z

#5

I set it for a long position! I just used the tool on the left hand side of the trading view graph

1 Like
#6

I guess you mean this one:
https://www.tradingview.com/support/solutions/43000518141-pitchfork/

Carlos Z

#7

Hi Carlos-- no, that screen is what comes up when i click ‘long position’. similarly (although conversely), it also shows up for the ‘short position’ Screenshot_20210413-125417 Screenshot_20210413-125311

1 Like
#8

This long/short drawing creates a template for 3 actual orders when you right click on it and select Create Limit Order.

Long example:
The entry price is in the MIDDLE.
Take Profit price is at the top of green area.
Stop loss price is at the bottom of red area.

Short example:
The entry price is in the MIDDLE.
Take Profit price is at the bottom of green area.
Stop Loss price is at the top of red area.

Also, you could try it out with TradingView’s Paper Trading feature to understand what price triggers what.

2 Likes
#10

Okay. I have a bit of a clearer view. I found this excellent video on YT that really helps get into the details about the data that tradingview gives: https://www.youtube.com/watch?v=GmZNV14qbRk

my question is; do people typically set the profit price really really high if they don’t plan to sell for a while? I imagine that whether or not someone is going to use these long/short position is dependent upon the type of trading they are doing (like day traders or swing traders, vs. long term HODLers). I can’t really think of a converse example question about short positions because for some reason that makes more sense to me to have a specific number in mind to buy at.

1 Like
#11

That depends on the trader strategy, for example, i have a portfolio which is at long term (hodling), then i have a trading portfolio, a portion of my funds that i use to trade weekly or monthly, one of the coins is for long term gains (which start to pump yesterday after months hodling), I have a set of orders on higher prices than actual, because based on my TA, it will reach those prices any moment in the future (1st order was reached yesterday at night for me).

Also i suggest you this YT channel which have great tutorials for tradingview :nerd_face:
https://www.youtube.com/channel/UCOPeHgsubs2K686vF_sPVgQ

Carlos Z

1 Like
#12

thank you Carlos! I am coming to find that defining the term ‘trading strategy’ is helpful as I am learning these trading tools, as it really emphasizes the personalization in how to use them. Thank you for sharing- I will check out this individual. I’m glad we have these links saved in the forum now- easy to find for future use!

for your long-term HODL, do you set the take profit price very high?? I am still wondering if trading view will automatically sell at that take profit price, of if it needs to be told to do that

#13

Indeed, but i just use trading view as my TA tool, then i have binance has my main trading exchange, so based on my trading view TA, I put some orders veeeery high, like 5x to 10x the actual price (remember i based this on my TA, im sure at any time in the future, the token will reach my crazy levels).

Carlos Z

1 Like
#14

Thanks for your response Carlos! I understand what you are saying and it looks like we had the same idea!!

1 Like
#15

I’m trying to develop and train an Machine-Learning(ML) Crypto Auto-bot on how to trade on Crypto Futures/Leveraging market. I have a very unique “Profit Taking” strategy which makes it difficult for me to choose any off-shelf Crypto bots. I think my issue currently is, how do you train a machine to really understand Leveraging/Options in the Crypto Trading platform. Even I still don’t know how Leveraging works in Crypto, so how do I intend to train a machine?

#16

well i don’t think that the machine itself needs to understand anything. You can probably develop an algorithm using risk/reward ratios that the bot can integrate into a trade. i.e. write code that indicates “IF (asset) reaches X dollar value, THEN enter Y dollar value amount on long/short position at risk/reward ratio of Z”, where by you can set Z to any value you’d like (.3, .5, .7, whatever)

1 Like