1️⃣ One-way Mode (One-way mode)

In one pair (, for example BTC/USDT ), you can only have 1 direction of position:

If you already have a long position, then when you open a short position, the long position will be closed or reversed to short, depending on the lot size.

Suitable for trend following or strategies that focus on one direction only.

Simpler, but cannot hedge (protect position).

Example:

You long 1 BTC.

Then open a short of 0.5 BTC → your long position decreases to 0.5 BTC (not two separate positions).

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2️⃣ Two-Way Mode (Hedge mode)

You can have long and short positions simultaneously in the same pair, separately.

Suitable for hedging or multi-directional strategies.

The risk is more complex because you can lose on both sides if the calculations are wrong.

Example:

You long 1 BTC.

Then open a short for 0.5 BTC → now you have two positions:

Long 1 BTC

Short 0.5 BTC

Both operate independently, with separate PnL.