Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
i wish someone could explain to me this in english, I understand that a short is betting that it will go down, long the opposite, but how does it work in detail? can someone give me an example? like they were explaining it to a 5 year old? lol. 
Why does it matter that there are 7300 shorts? because thats a shit ton?
Why does it matter that there are 7300 shorts? because thats a shit ton?
Shorting can be seen as this: Right now BTC price is $500 a coin (example) and you think it will be $400 in a week. You don't have any Bitcoins to sell yourself right now so you basically "borrow" someone elses 10 bitcoins and sell them for $500 now. You now have $5,000, but you owe that "person" back 10 coins. So as it turns out your right and the price drops to $400, you now buy back the 10 coins you owed at $400 each, so you spend $4000 and you pay that person's coins back. You just made $1,000 off a falling bitcoin price.
I'm sure someone that uses bitfinex or any other stock exchange often can explain it far better than I, but that's a start. So a high amount of short orders right now, means that many many people are feeling the BTC price will continue to fall....and they are putting their money where there mouth is.
So, lets say I shorted, like in your scenario, could I sell at 450 and only make 500? or do I have to wait til I hit 400?or if it plummets further can I sell at 350 and make 1500? is that right? now, what if it doesn't go down, when am i screwed with a margin call?