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long and short

Long / Short

Trading

Definition

Long is a buy that profits when the price goes up, and short is a sell that profits when the price goes down. In futures, both directions are equally simple: a short position is opened with one click, just like a long.

Detailed explanation

In prop firms, there is no restriction on direction, but there is a restriction on combining them: open long and short positions together on the same asset, or on correlated assets like NQ and MNQ, constitute hedging, and this is prohibited in almost all firms, even when each side is in a different account. The correct way to reverse direction is to close the existing position, and only then open the new one.

An example from the prop world

A short of 2 MNQ contracts at 21,000 and closing at 20,980 is 20 points in your favor: 20 points times $2 times 2 contracts, $80 before commissions.

How it works at the firms on this site

Based on the rules listed on our firm pages. Rules get updated, so check the firm's page before buying.

The beginner's guide

From the first evaluation to the first payout

Hedging

Opening opposite positions, long and short, on the same underlying asset or on correlated assets at the same time, in the same account or across accounts. At most prop firms this is prohibited.

Order types: market, limit, and stop

A Market order fills immediately at the next available price. A Limit order fills only at the price you set or better, so it may not fill at all. A Stop order becomes a Market order when the price touches the level you set, which is how a stop loss is placed.

סטופ לוס

An exit order that closes a losing trade at a predetermined level. In a prop account, a stop is not just good risk management: it's what separates a bad trade from crossing the drawdown threshold and failing the account.

Futures contract

A standard agreement to buy or sell an asset at a price set today, for a future date. Prop firm traders do not hold the contract until expiration: they enter and exit on the same day, profiting or losing from price movement. Each contract pre-defines how many dollars each movement is worth.

News trading policy

This is a risk management rule in funded trading accounts that prohibits traders from opening, closing or modifying active positions within a set time window (usually a few minutes) before, during and after the release of major high-impact economic events (Tier One).

Trade copying

Automatically duplicating every trade from a lead account to follower accounts, so you trade once across several accounts. It's done with software such as TradeSyncer or Replikanto, or with a copy tool built into the platform.