Understand Full Margin and Isolated Margin in 3 Minutes: How Did You Lose Your Money?
A Must-Read for Beginners! Today, I will explain the crucial differences between these two deadly modes in simple terms, and you will at least be able to reduce your losses by 30%!
1. Isolated Margin Mode: It's All About the Thrill
Your margin is like chips on a gambling table; if you lose, that's the money for this round.
You can play both long and short positions simultaneously, and they do not affect each other.
The biggest advantage: if you get liquidated, you only lose the money in that position, and the rest remains in your pocket.
Suitable for: Short-term traders who like precise targeting, or experienced players who want to hedge both long and short.
2. Full Margin Mode: Either Get Rich or Get Liquidated
All the money in your account is used as margin; if you make money, you're happy, if you lose, it's a disaster.
All positions are calculated together, providing stronger risk resistance.
The biggest advantage: you won't easily get shaken out by small fluctuations, suitable for large capital operations.
Suitable for: Long-term investors or professional players engaged in hedging.
A Painful Example:
Xiao Ming and Xiao Hong each took $2000 to open a 10x long position.
Xiao Ming used isolated margin: liquidation price $8000, if it drops to that, he loses $1000 and still has $1000 left.
Xiao Hong used full margin: liquidation price $7000; he can still hold at $8000, but if it continues to drop... he loses all $2000.
The key point:
Full margin is like betting all your money on one table; either you win big or you cry in despair.
Isolated margin is like betting at separate tables; if you lose at one table, you can still play at another.
Final Advice:
Beginners are advised to start with isolated margin so they won't lose everything in one night. Experienced players using full margin should also control their positions; don't wait until liquidation to remember what I said!
If you find this helpful, give it a thumbs up, and in the next issue, I will teach you how to set stop-losses safely.