Understand Margin Trading and Full Margin in Two Minutes! A Must-Read for Newbies, Don't Wait Until Liquidation to Regret!
1. Margin Trading Mode: It's all about the thrill, but you can afford to lose
Your margin is like a separate bet on a table; winning is exhilarating, but if you lose, you only lose this round. Opening long and short positions? No problem at all! Each position is settled independently; if you get liquidated, just consider it tuition for the market, while the rest of your funds remain safe.
2. Full Margin Mode: Either you get rich or you go to zero
All the money in your account is your ammunition, withstanding volatility, but if a black swan event occurs, it might wipe you out completely. Suitable for experienced traders for hedging or quant trading, but remember—check your bank balance before going all in!
3. Harsh Comparison
- Full Margin: Survives in volatile markets, but a single spike could mean disaster
- Margin Trading: Liquidation feels like being bitten by ants, but frequent stop-losses can be painful too
Real Case Warning ⚠️
A (Margin Trading) and B (Full Margin) each take $2000 long on BTC with 10x leverage:
- Drops to $8000: A loses $1000 and exits, B grits their teeth and holds on
- Continues to drop: B might lose the entire account, but what if it rebounds...
Advice:
Newbies should start with margin trading to test the waters, while veterans using full margin need to be aware of the risks. Remember: leverage is not for reckless gambling; surviving is key to profiting in a bull market!
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