🔥 Must-read for contract trading: Full margin vs. isolated margin, don’t choose the wrong mode and lose your capital!
Trading crypto contracts, full margin and isolated margin aren't inherently good or bad; it's all about what fits your strategy! Newbies picking the wrong mode can face frequent liquidations, or worse, wipe out their account overnight; while veterans using the right mode can manage risk and enhance capital efficiency. This piece breaks down the core differences, pros and cons, and suitable scenarios, so you won't fall into traps anymore!
1. Core definition: Understand the essential difference in one sentence.
- ✅ Full margin (cross margin): All account funds act as shared collateral for all positions. If one position goes south, the entire account covers it, sharing risk and rewards.
- ✅ Isolated margin: Each position's collateral is independently isolated. If one position gets liquidated, the maximum loss is limited to that position's collateral, leaving other funds in the account unaffected.