Position-by-position and full position are two completely different strategies, each with its own characteristics and applicable scenarios.
Position-by-position strategy: Imagine that when you invest in a position-by-position manner, it is like setting a "safety cushion" for each transaction. You lock in part of the funds in advance as the "bottom line" of this transaction, and this part of the funds remains unchanged no matter how the market fluctuates. In this way, even if the market wind direction suddenly changes, causing your position to be forced to close by the system, your losses are also "circled" by the fixed margin and will not expand indefinitely. This method is suitable for investors who like flexible operations and pursue short-term returns.
Full position strategy: Full position is more like putting all your "ammunition" on a certain front. All the available funds in your account become the margin for your position, so your risk resistance is naturally strong because you have more funds to resist market fluctuations. Of course, this also means that once the market is in extreme conditions, your losses may be very heavy. However, for investors who are patient and pursue long-term stable returns, full position may be a good choice.
Detailed explanation of the difference between the two:
1. Margin difference: For position-by-position, fixed funds are used as the guarantee for each transaction, while for full position, all the funds of the entire account are invested in the position.
2. Risk resistance: Because of the large amount of funds, full position is more resistant to market fluctuations and is not easily forced to close positions; position-by-position is relatively "fragile", but because of this, it is also more flexible.
3. Potential loss: Once a full position encounters extreme market conditions, the loss may be very huge; while for position-by-position, because a "safety cushion" is set, even if the position is closed, the loss is relatively controllable.
4. Investment cycle: Full position is more suitable for investors who have long-term plans and are willing to wait patiently; position-by-position is more suitable for investors who like to enter and exit quickly and pursue short-term profits.
Position-by-position and full position are like two different styles of warriors on the road of investment, one is flexible and changeable, and the other is steady and steady. The key to choosing which strategy is to look at your investment goals, risk tolerance and market judgment.
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