In trading, what is the difference between full position and position by position?
Many people often ask what is the difference between full position and position by position.
Simply put:
Full position means that all the money in the account can be used as margin, so it is not easy to be forced to close the position. If the leverage is used properly, the risk of liquidation is relatively small, so this mode is often used for hedging.
Position by position means that each trading position has its own margin, and this amount is fixed. If the margin of a position is not enough to compensate, then the position will be forced to close. When the price fluctuates greatly or the leverage is high, the position by position mode is more likely to be forced to close, but the loss is only the margin of that position, and it will not affect other money in the account.
Full position margin means that the money in the entire account is used to support all positions
And position by position margin means that each position has its own money
In general,
Full position is more suitable for experienced users or institutions to use for hedging,
And position by position is more suitable for novices because it can control the scope of loss.
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