When you first encounter contract trading
Have you also heard the terms "full margin" and "isolated margin"?
And then you were left confused, what does it mean? What’s the difference?
Today, Orange Brother will clarify it for you.
📌 What is full margin?
As long as you have money in your account, it is all used as collateral.
If one position incurs a loss, the system will also pull from the other money in your account to cover the loss.
It's a bit like: I bet everything I have, if I lose, I lose it all; if I win, I gain more.
For example,
If you have 1000 yuan in your account and only use 200 yuan to open a contract,
But you are using full margin.
If you lose, after the 200 yuan is completely lost, it will also touch that 800.
Even if your direction is correct, a single liquidation could wipe you out completely.
📌 What is isolated margin?
When you open a position, you use a fixed amount of money, and you can only lose that portion.
If you say you only want to play with 200 yuan, then only that 200 is at risk.
The other 800 is very safe and does not participate.
In other words,
Using isolated margin is like dividing troops in battle.
If one battalion loses, the other battalions are still intact, and it has no impact.
🧠 So which one should you choose?
Let's talk about it... 🧠 So which one should you choose?
Newcomer suggestion: use isolated margin.
Why?
It has strong risk resistance, and even if you lose, there is room for maneuver.
Full margin can easily “break you,” especially when the market is volatile.
But experienced traders might use full margin; they can flexibly mobilize funds and have high efficiency in stop-loss and take-profit.
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⚠️ Pitfalls to avoid
Don't start with full margin when you know nothing.
You think you are a trader, but in reality, you are a gambler.
First, practice your logic and do a good job of risk control.
Then slowly consider whether to use full margin to improve efficiency.
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To summarize 👇
Full margin: All the money in the account is staked; one loss affects all.
Isolated margin: Each position plays separately, and you can only lose the money of that one position.
Don't be confused anymore.
Learn to distinguish, and you will be one step closer to stable profits.
