The difference between full position and isolated position in currency circle
- 王林Original
- 2024-07-23 20:03:02738browse
The currency circle trading mode is mainly divided into full position and isolated position, which respectively correspond to the characteristics of high liquidation risk but low capital utilization rate, and low liquidation risk but high capital utilization rate.
The difference between full position and isolated position in the currency circle
Answer:
Cross position and isolated position are two different trading modes in the currency circle. The main difference lies in the risk of liquidation and capital utilization.
Cross Margin Trading Mode
- High risk of liquidation: In cross margin mode, if the account funds are lower than the position value, liquidation will be triggered. After liquidation, all assets in the account will be liquidated.
- Low fund utilization rate: In the cross position mode, all funds are used to open positions, and the fund utilization rate is low.
Isolated margin trading mode
- Low risk of liquidation: In the isolated margin mode, each position calculates its profit and loss independently, and liquidation only affects the losing position. Other positions are not affected.
- High capital utilization rate: In the isolated position mode, only part of the funds are used to open a position, and the capital utilization rate is higher.
Compare
| Features | Cross Margin Trading | Isolated Margin Trading |
|---|---|---|
| Blowout Risk | High | Low |
| Fund utilization rate | low | high |
| Flexibility of position opening | Low | High |
| Suitable people | Those with low risk tolerance and stable profits | Traders with high risk tolerance and large fluctuations |
Choose It is recommended that
- Traders with low risk tolerance and stable trading strategies are suitable for the full position mode, which can obtain a lower risk of liquidation.
- Traders with high risk tolerance and large trading fluctuations are suitable for the isolated position mode, which can improve capital utilization and cope with market volatility.
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