I've seen too many people stumble in the contract market: opening positions based on the 'feeling it will rise' and gambling with leverage, only to hold on when the market moves against them, until the system pops up a liquidation warning, leaving them staring at the screen in shock: 'I obviously only invested a few hundred, how come there's not a penny left in my account?'
Today, let's uncover the true nature of full margin and individual margin - these two fundamental models may determine the thickness of your wallet more than the K-line charts in your hands.
Individual margin: a 'firewall' for beginners against risk.
Individual margin is like drawing a safety circle around each trade. When you open a position with 500U as margin, that number is the ceiling for your losses.
Even if the market crazily rushes in the opposite direction, at most you'll lose this 500U, and the system will automatically help you close the position; the other money in the account will remain intact.
Imagine: you set up a small stall at the night market with pocket money. Even if you lose money that day, you only lose the cost of the stall's goods, while your family savings remain untouched.
This model of 'independent risk control' is specifically designed to cure beginners' 'gambling addiction', making it the best choice for protecting principal while gradually practicing.
Full margin: a 'risk accomplice' hiding its fangs.
Full margin operates under a different logic: after opening a position, all your account funds become a 'suicide squad'.
When the market fluctuates, the system will automatically use the account balance to cover losses, which seems to have a high error tolerance - it's like when you set up your stall, not only are you putting in the stall's capital but also quietly betting your family's savings book.
But there's a deadly trap here: if you stubbornly hold on with the mindset of 'just wait a bit for a rebound', once the market suddenly turns and plummets beyond expectations, the originally small position's losses will avalanche, rolling down the leverage slope toward the entire account.
I've seen too many cases: opening a position with 500U, and eventually wiping out the 5000U of principal in your account, all because in full margin mode, risks are never accounted for separately.
How to choose? It depends on whether you dare to face the risk.
For beginners, blindly choosing individual margin will not go wrong. First, learn to judge trends, then practice risk control, ensuring every trade has an 'exit' - just like learning to drive, you practice braking first, rather than stepping on the accelerator right away.
If an experienced trader has a mature trading system and wants to improve capital efficiency, they can try full margin, but remember: the 'efficiency' of full margin is always built on strict stop-losses.
If you don't have this habit, don't touch it; otherwise, you're pushing your account into risk, equivalent to walking a tightrope with a bomb.
Contract trading is not about single-instance profits, but the ability to survive long-term. There's no good or bad in full margin or individual margin; it depends on whether you can manage the risk.
Market opportunities are frequent, but those who can seize them are always the ones who lay a solid foundation and manage risk well - understanding the rules early allows you to steadily catch opportunities when they arise, rather than watching your money being swallowed by the rules.