The Difference Between One-Way Mode and Hedge Mode
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1. What are One-Way Mode and Hedge Mode?
In cryptocurrency trading, one-way mode refers to holding a position in only one direction for a futures pair, without allowing both long and short positions simultaneously. Hedge mode allows holding both long and short positions for a futures pair simultaneously, enabling users to trade both bullish and bearish positions in the market at the same time.
2. Features of One-Way Mode
2.1 Positions can only be held in one dierection. Traders can only choose the direction for their trades. If an order is placed in the opposite direction, the system will automatically close the current position.
2.2 Simplified trading strategy. One-way mode means that traders focus on a specific market trend, either bullish or bearish. Traders need only monitor the market movement in one direction without considering positions in the opposite direction. This reduces the complexity of decision-making and allows for clearer trading strategy formulation.
2.3 Suitable for quick entry. Due to the nature of one-way mode, traders can enter and exit the market more quickly without waiting to close opposite positions, thus speeding up the execution of trades.
2.4 Focused risk and reward. Traders can concentrate on the risks and rewards of one direction, better managing and controlling risks associated with a specific direction, and more effectively setting TP/SL targets.
It is important to note that if the market trend reverses, traders holding one-way positions may miss profit opportunities or incur greater losses. Additionally, one-way mode may prevent traders from fully capitalizing on market volatility, as they can only profit from one direction.
3. Features of Hedge Mode
3.1 Ability to hold positions in both directions simultaneously. Traders can hold both long and short futures positions at the same time.
3.2 Flexible trading strategies. Traders can execute flexible trades based on market conditions and strategy needs, choosing to balance the proportion of long and short positions or adjust the size of positions according to market trends.
3.3 Hedging risk. By holding both long and short positions simultaneously, traders can hedge risks. When the market trend is uncertain or highly volatile, holding hedged positions can reduce overall risk and minimize potential losses.
It is important to note that hedge mode may not be suitable for all traders and market conditions. It requires advanced technical analysis and risk management skills, as well as a deep understanding of the market. Traders should carefully consider their choice of hedge mode strategy to ensure they have sufficient knowledge and experience to navigate complex and changing market conditions.
4. How to Set Up One-Way Mode or Hedge Mode
We will use USDT-M perpetual futures as an example. The process is the same for Coin-M perpetual futures.
4.1 Web
Log in on the MEXC official website. Select [USDT-M Perpetual Futures] under [Futures] in the top navigation bar to enter the trading page. Click the settings [⚙️] button at the top right corner of the trading page.
On the Preferences page, click [Position Mode]. You can choose and switch between [Hedge Mode] and [One-Way Mode]. After making your selection, click [Confirm] to complete the setup.
4.2 App
1）Log in on the MEXC App, then tap the [Futures] button at the bottom of the homepage.
2）Tap the [...] at the top right corner.
3）Select [Preferences].
4）Tap [Position Mode].
5）You can choose between [Hedge Mode] and [One-Way Mode]. After switching, the setup will be complete.
Please note that if you have open orders or active positions, you cannot change the position mode. You will need to cancel your orders or close your positions first, and then you can change the position mode.
Disclaimer: This information does not provide advice on investment, taxation, legal, financial, accounting, consultation, or any other related services, nor does it constitute advice to purchase, sell, or hold any assets. MEXC Learn provides information for reference purposes only and does not constitute investment advice. Please ensure you fully understand the risks involved and exercise caution when investing. The platform is not responsible for users' investment decisions.