๐๐๐ ๐๐ช๐ฉ๐ช๐ง๐๐จ ๐พ๐ค๐ฃ๐ฉ๐ง๐๐๐ฉ ๐ค๐ฃ ๐ฝ๐๐ฃ๐๐ฃ๐๐
Thsere are two ways of trading Futures within the Binance platform, each with its inherent benefits and risks. Understand each is critical to effectively trading futures and managing risks. Lets take a deep dive of the two modes:
๐ญ. ๐ข๐ป๐ฒ ๐ช๐ฎ๐ ๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ฒ ๐๐๐๐๐ฟ๐ฒ๐
One-way futures and hedge mode on Binance perpetual futures differ primarily in position flexibility and risk management. In One-Way Mode, traders can only hold a position in one direction (long or short) for a single contract at a time. For example, you can open a long position on BTCUSDT, but opening a short position on the same contract would cancel or reduce the existing position. This mode is simpler, suited for directional trading, but limits simultaneous opposite positions, increasing risk if the market moves unfavorably.
๐ฎ. ๐๐ฒ๐ฑ๐ด๐ฒ ๐ ๐ผ๐ฑ๐ฒ
In contrast, Hedge Mode allows traders to hold both long and short positions on the same contract simultaneously, like 1 BTC long and 0.5 BTC short on BTCUSDT. This strategy mitigates risk by profiting from market movements in either direction while reducing potential losses. Hedge Mode requires manual activation and is ideal for volatile markets, offering greater flexibility and risk management.
๐ฃ๐ฒ๐ฟ๐๐ผ๐ป๐ฎ๐น ๐ฅ๐ฒ๐ณ๐น๐ฒ๐ฐ๐๐ถ๐ผ๐ป/๐ฃ๐ฟ๐ฒ๐ณ๐ฒ๐ฟ๐ฒ๐ป๐ฐ๐ฒ
I prefer trading using hedge mode as it allows me to adjust my position in case it goes against my desired direction. When a position moves against my directioni usually open a position in the opposite direction and allow the two positions to run simultaneously. Once a move in one direction is exhausted, close it at a profit and allow the remaining to run to profit, before closing it.
