Short position refers to the situation that the customer's rights and interests in the investor's margin account are negative under some special circumstances. When the market situation changes greatly, if most of the funds in the investor's margin account are occupied by trading margin, and the trading direction is opposite to the market trend, it is easy to explode the position due to the leverage effect of margin trading.

The following three aspects will easily explode:

1, leverage-the temptation of "small and wide". People like to use leverage. Some people use 500: 1 lever, while others use 400: 1 lever. Even the lever of 100: 1 is often used. I seldom use leverage below 100: 1 in foreign exchange transactions because I am used to it. It is precisely because of the use of leverage that the transaction is actually magnified many times, making it more difficult to make a profit, but it is easier to lose money.

2, long and short-the temptation of "two-way profit" Ordinary people immediately become very naive when they see "long and short two-way trading, two-way profit". The normal first reaction is: I can make a profit no matter whether the market trend is up or down, because I can buy or sell. I can follow the crowd. If the price goes up, I will buy more, if the price goes down, I will sell short. However, this is not the case, or even the opposite. If you judge the wrong direction, when you buy too much, you will also make the mistake of shorting. This is a two-way loss and acceleration loss.

3, real-time trading-accelerate the explosion of positions literally means real-time trading: if you like, you can open and close positions every second. You can keep each transaction for one second before closing the position, or you can complete a transaction within one minute. You can open and close positions at any time if you like.