Many newcomers are confused as soon as they enter the contract interface:
"What is full position? What is isolated position? What is that countdown rate?"
Don't worry, today we are starting a new series - 【Learning Contracts from Scratch】.
In this first lesson, I won't talk about abstract theories. Let's look at the computer screen and recognize these buttons that determine your life or death.
This is not just a tool, but also your weapon and shield on the battlefield.
1. Full position (Cross) vs Isolated position (Isolated): your "lifesaving mode"
Look at the first image, which is in the upper right corner of the trading interface, the pop-up for margin mode.
Cross margin: All the money in your contract account is collateral.
In simple terms: 'Grasshoppers on the same rope'. For example, if you open positions in both $BTC and $ETH, as long as one goes bankrupt, the remaining money in your account (even if it’s not in an open position) will be sucked in to fill the hole.
Advantages: Strong holding ability, not easy to explode.
Disadvantages: Once it explodes, it’s uprooted, and the account goes to zero.
Isolated margin: The money for this position is only for this position; if you lose it all, it’s done, and it doesn’t affect the other money in the account.
In simple terms: 'Dedicated funds'. If this position fails, it fails; don’t touch my other money.
Advantages: Risk isolation, suitable for newcomers and those who can’t control their gambling instincts.
Disadvantages: Easily kicked out if the fluctuations are slightly larger.
💡 Suggestions for newcomers: Please engrave **'isolated margin'** in your mind. Unless you are an experienced trader hedging, don't touch the cross margin.
Two, Leverage: The amplifier of desire
Right next to the margin mode, click that multiplier (like 10x), and this slider will pop up.
This slider determines your capital utilization rate, and also how fast you can lose everything.
10x means: As long as $BNB fluctuates by 10%, your principal will double or go to zero.
100x means: As long as it fluctuates by 1%, you’re out.
💡 Suggestions for newcomers: Don’t believe in any 'hundredfold war gods'. In the crypto world, those who survive for a long time usually float between 2x - 5x. Before raising leverage, ask yourself if you can bear the pain of instant loss.
Three, Funding Rate: The invisible 'overnight fee'
Hover the mouse over the small text 'Funding Rate' at the top of the interface to pop up this detail box.
Many newcomers lose money and don’t even know where it went; in fact, it’s eaten away by this thing. This is the interest paid by both long and short positions to balance the price.
Positive rate (green): Long position holders pay short position holders.
Negative rate (red): Short position holders pay long position holders.
Countdown: Settled every 8 hours (usually at 0:00, 8:00, 16:00).
💡 Suggestions for newcomers: When you see a very high rate (like 0.1% or even higher), don't easily hold large positions overnight. At such times, just the fees can make you feel the pain.
Four, Summary
Contracts are not a casino, they are a battlefield.
If you're not familiar with your weapon, going into battle is just giving away kills.
Next time, we'll talk about **'Limit Orders vs Market Orders'**, and tell you why you always buy at the peak and sell at the bottom.
Follow me so you won't get lost, I'll take you from zero to understanding contracts.🛡️
Brothers who want to practice can first go to the demo account to feel it (remember to use isolated margin + low leverage!).
