What is Hedge Mode?

Hedge Mode allows users to hold both long and short positions simultaneously on the same perpetual contract trading pair. This platform supports Hedge Mode by default.

In Hedge Mode, long and short positions are displayed and calculated independently. Users can manage opposing positions on the same contract simultaneously, each serving a different trading strategy.

📚For example, a user holding a 1 XAU long position in the XAUUSD Perpetual Contract can also hold a 0.5 XAU short position at the same time. The long and short positions are displayed as two separate directional positions, and users can add to, reduce, close, or set TP/SL for each independently.

Hedge Mode vs. One-way Mode

The key difference between Hedge Mode and One-way Mode is whether you can hold both long and short positions on the same contract at the same time.

In One-way Mode, only one net position direction is allowed per contract. Buying increases the long position or reduces the short; selling increases the short position or reduces the long.

In Hedge Mode, both long and short positions can exist on the same contract simultaneously. Opening a long and opening a short each form independent directional positions — they are not netted automatically.

How Hedge Mode Works

In Hedge Mode, order direction must distinguish between opening and closing a position.

    Buying to Open Long increases the long position.

    Selling to Close Long decreases the long position.

    Selling to Open Short increases the short position.

    Buying to Close Short decreases the short position.

📚For example, suppose a user currently has no XAUUSD position:

        1.Submitting a Buy to Open Long for 1 XAU creates a 1 XAU long position.

        2.Submitting a Sell to Open Short for 0.5 XAU adds a 0.5 XAU short position.

        3.The user now holds a 1 XAU long position and a 0.5 XAU short position simultaneously.

        4.If the user submits a Sell to Close Long for 0.3 XAU, the long position decreases to 0.7 XAU; the short position is unaffected.

        5.If the user submits a Buy to Close Short for 0.2 XAU, the short position decreases to 0.3 XAU; the long position is unaffected.

How Are Long and Short Position PnL Calculated?

In Hedge Mode, PnL for long and short positions is calculated separately.

Long Position PnL

Long positions typically generate profit when prices rise and incur losses when prices fall.

For example, a user opens a long position in XAUUSD at 6,000 USD. If the price rises to 6,100 USD, the long position shows an unrealized profit; if it falls to 5,900 USD, it shows an unrealized loss.

Short Position PnL

Short positions typically generate profit when prices fall and incur losses when prices rise.

For example, a user opens a short position in XAUUSD at 6,000 USD. If the price falls to 5,900 USD, the short position shows an unrealized profit; if it rises to 6,100 USD, it shows an unrealized loss.

Common Uses of Hedge Mode

1. Managing Different Strategies on the Same Contract

Users can maintain both long and short positions on the same contract simultaneously to separate different trading strategies.

For example, a user with a long-term bullish view on XAUUSD but expecting a short-term pullback can keep the existing long position while opening a partial short for short-term strategy management.

2. Managing Each Directional Position Independently

In Hedge Mode, long and short positions are independent. Users can set TP/SL, add to, or reduce each position separately.

For example, a user can set a take-profit price for the XAUUSD long position and independently set a stop-loss price for the XAUUSD short position.

3. Navigating Range-Bound Markets

When price volatility is high or market direction is unclear, some users may set up both long and short positions across different price ranges to adapt to changing market conditions.

Please note that holding both long and short positions simultaneously does not eliminate risk. Market volatility, funding costs, trading fees, and margin usage can all affect account equity.

How to Close Positions in Hedge Mode

In Hedge Mode, you must select the corresponding position direction when closing.

      To reduce a long position, use Sell to Close Long.

      To reduce a short position, use Buy to Close Short.

Selecting an open-position direction will not reduce an existing position — it may instead add a new position in the opposite direction.

📚For example, a user currently holds a 1 XAU XAUUSD long position and a 0.5 XAU short position:

       To close 0.3 XAU of the long position, select Sell to Close Long for 0.3 XAU.

       To close 0.2 XAU of the short position, select Buy to Close Short for 0.2 XAU.

If the user mistakenly selects Sell to Open Short for 0.3 XAU, the long position will not be reduced — instead, the short position will increase.

TP/SL in Hedge Mode

In Hedge Mode, TP/SL can be set independently for long and short positions.

    For a long position, the take-profit price is typically set above the entry price, and the stop-loss below.

    For a short position, the take-profit price is typically set below the entry price, and the stop-loss above.

📚For example, a user holding both a XAUUSD long and short position:

       The long position can have a take-profit set for upside moves, or a stop-loss for downside moves.

       The short position can have a take-profit set for downside moves, or a stop-loss for upside moves.

TP/SL for each direction applies only to the corresponding position. Users should verify the position direction, trigger price, and close quantity before confirming.

Margin and Risk in Hedge Mode

In Hedge Mode, long and short positions are in opposing directions, but each typically consumes its own margin and carries its own price risk.

Holding both long and short positions simultaneously does not fully offset risk. Users may still encounter the following:

             1.Both positions incur separate trading fees and funding costs.

             2.Each directional position may generate its own unrealized PnL.

             3.During sharp market moves, one directional position may face insufficient margin or forced liquidation.

             4.With high leverage, even small price movements can have a significant impact on account equity.

             5.The larger the position size, the higher the potential margin usage and risk exposure.

Key Considerations for Hedge Mode

  1.Hedge Mode allows both long and short positions to be held simultaneously on the same contract.

  2.Long and short positions are displayed separately, PnL is calculated independently, and each can be closed individually.

  3.Always confirm the position direction when closing to avoid accidentally opening a position in the opposite direction.

  4.Long position take-profit is typically above the entry price and stop-loss below; for short positions, it is the reverse.

  5.Holding both long and short positions simultaneously does not mean there is no risk — trading fees, funding costs, margin usage, and forced liquidation remain potential concerns.

  6.Users should set position size, leverage, margin mode, and TP/SL according to their individual risk tolerance.

  7.Perpetual Contracts are leveraged products. Price volatility can lead to insufficient margin and forced liquidation. Please trade with caution.