Many people engage in contracts, and when asked, 'Are you using full position or isolated position?', the other party looks confused.
More seriously, some people don't even understand the difference between these two, and just jump into leverage trading, resulting in liquidation without even knowing how it happened.
Today's article won't pile up on terminology, but will clarify these two modes. After reading, you can decide how to choose.
First, let's talk about isolated position:
Isolated position means that whatever amount you invest in this contract, that's the maximum you can lose.
For example, if you have 5000U in your account and you only use 500U for this trade, even if the market moves against you, you can only lose that 500U at most, and it won't drag your entire account down.
Who is it suitable for? It's suitable for those who want to control risk and prefer a steady approach.
You can treat each trade as an independent battle, and you won't lose your entire portfolio just because one trade goes wrong.
Now let's talk about full position:
Full position means that if this trade fails, the remaining money in your account goes down with it.
The system will use the remaining funds in your account to support the current position until the whole account can't sustain it anymore, and then it will liquidate all at once.
It sounds like 'higher tolerance for error', but the risk is also greater.
Many people's illusion with full position is: I can withstand it, but when a big fluctuation occurs, everything can go wrong at once. Especially for those who like to hold positions and do not set stop-losses, full position is almost a ticking time bomb.
So how should you choose?
If you are still familiarizing yourself with the market or just starting to try contracts, prioritize using isolated position; it’s the most direct way to protect your principal.
Once you have your own trading system and can execute risk control consistently, then consider using full position to improve efficiency—but even so, you must set a good stop-loss.
Ultimately, the essence of contracts is not to make quick money, but to allow you to withstand longer and walk steadily.
Don't treat your account as a casino; if you don't even understand how the risks come about and dare to place heavy bets, that's not trading, that's gambling with your life.
Full position and isolated position are not about which is more advanced, but whether you have the ability to manage them.
In this round of market, whether you can recover your losses depends entirely on yourself. Start laying out plans with me early so you can come out of the low point sooner.
$GUN $ARC $Q
