Bitget: How to open and close a position in hedging mode

As mentioned earlier, hedging mode allows investors to hold both long and short positions simultaneously. Bitget futures trading defaults to hedging mode, but investors can switch between hedging mode and one-way mode at any time. This flexibility enables them to go long (anticipating a price increase) and short (anticipating a price drop) on the same trading pair.

Choosing a position mode is particularly important in futures trading. In volatile or uncertain markets, holding a position in one direction often involves significant risks. However, hedging mode offers an opportunity to mitigate risk, allowing investors to potentially profit regardless of market direction.

1. How to set hedging mode

1.1 On the app

Open the Bitget app, tap on Futures in the navigation bar, then tap on the three-dots icon (...) in the upper right corner. Tap on Futures settings, and select Position mode from the pop-up menu. Bitget futures trading defaults to hedging mode. If you wish to change to one-way mode, you can also select it here.

1.2 On the web

On the Bitget futures trading homepage, click on Preferences in the upper right corner, then click on Position mode in the pop-up menu and select Hedging mode.

2. How to open a position in hedging mode

While hedging mode allows investors to potentially profit during uncertain markets, incorrect market judgment can lead to losses on both positions. Additionally, holding both long and short positions requires higher capital and transaction fees. For those considering hedging mode, here are some tips for opening positions effectively:

2.1 Analyze market trends

￮ Before opening positions, investors should gain a solid understanding of current market conditions. Bitget recommends using technical analysis tools, such as trend lines, moving averages, and indicators, to gauge market trends.

2.2 Select trading pairs

￮ Based on your analysis and strategy, choose suitable trading pairs on the Bitget Futures trading page. Cryptocurrencies with high liquidity and volatility, such as Bitcoin and Ethereum, are ideal for hedging mode.

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2.3. Determine position direction and size

￮ In hedging mode, investors can open both long and short positions. Set the direction and position size based on your strategy and market outlook.

￮ Go long if you anticipate an increase and go short if you expect a decrease. Position size should align with your risk tolerance and capital management plan.

￮ Margin mode: Cross margin or isolated margin. Each futures contract can only use one margin mode. For example, if you choose isolated margin for btcusdT, you can open a long and short position using isolated margin. Note: You cannot switch margin modes if you have any open positions or orders.

2.4. Set TP/SL price levels

￮ Upon opening a position, set take-profit (TP) and stop-loss (SL) price levels. When the SL level is hit, positions will be automatically closed to limit losses. When the TP level is hit, positions will be automatically closed to secure gains. TP/SL is especially important in hedging mode, preventing unnecessary losses during extreme market conditions.

￮ The TP and SL price levels should be determined based on market volatility, trading pairs, and your own risk tolerance. Generally, the SL level should be set below the entry price, while the TP level should be set above it, each by a specified percentage.

3. How to close a position in hedging mode

3.1 Manual close

￮ When the market price reaches the TP or SL price you set, you can close the position manually. Manual closing requires you to closely monitor the market and make timely decisions.

￮ When closing manually, you can choose to close either the long or short position first, or close both positions simultaneously.

3.2 Auto-close

￮ Bitget offers an auto-close function. When the market reaches your TP or SL levels, the system will automatically close the position, helping investors avoid missing the closing opportunity due to personal oversight or emotional factors.

￮ When using auto-close, ensure that your TP/SL price levels are reasonable and regularly reviewed and adjusted.

3.3 Partial close

￮ In hedging mode, investors can partially close positions, allowing you to close part of your position while keeping the remaining position active.

￮ A partial close enables you to lock in some profits while maintaining a position to capitalize on market changes. The ratio for a partial close should be based on market conditions and your strategy.

4. Important considerations

4.1 Risk control

￮ Hedging mode provides greater flexibility and strategic options, but it also increases trading risks. Investors should exercise strict risk control, set TP and SL levels wisely, and avoid excessive leverage or blindly following trends.

4.2 Fund management

￮ Effective capital management is crucial for successful trading. Investors should allocate funds wisely and avoid over-concentration in one position. Additionally, position size should be adjusted based on market conditions and risk tolerance.

￮ Given the unpredictability and volatility of cryptocurrencies, investing in high-leverage derivatives like perpetual futures can lead to the loss of all invested capital in minutes. Therefore, investors should adhere to stricter limits. A general rule of thumb when trading volatile assets is to risk only 5% to 10% of capital on a specific trade.

￮ For example, if you have 10,000 USDT in your Bitget futures account and you risk 500–1000 USDT on each trade, a losing trade would result in a loss of only 5% to 10% of your account balance. Effective risk management involves determining the right position size, knowing how to set and adjust stop-loss levels, and considering the risk/return ratio. A robust fund management plan enables you to build a portfolio that won't keep you up at night.

Hedging mode offers investors greater flexibility and strategic choices in crypto trading. Mastering how to open and close positions in hedging mode empowers investors to seize market opportunities with greater confidence and success.