We are still talking about margin mode and yesterday we talked about Isolated margin mode, Today we are going to talk about cross margin mode,
But first we need to know how to switch from Isolated to cross. If you are beginner when you open the future options you will find that you have been set on isolated by default
Let me show some images that can direct you how
Click on the blue circled button ( for beginners the button will be reading Isolated)
Then it will take you to some thing like this š
then you choose cross (click on that box ) and now that you are set up
What you should know and How does cross margin affect your trade,
When it comes to cross margin, Every position you enter will affect how much assets you have in your account when the broker is calculating your liquidation point.
When the liquidation point is hit you will loose all the assets in your a/c, that's why you see pple having more than 100% in negatives But also remember if u have different assets like usdt and usdc and you traded using usdt, it only affects the usdt account but your usdc will be safe.
When it comes to leverage, since the position affects your whole account of a particular asset it may not play big role but the amount of an asset you decide to trade will be the main player in determining your liquidation point that's why you see some trades may not have a liquidation point but remember if the trade goes against your entry as ur usdt are being depleted the liquidation point extends closer and closer.
Now this is the trick u can enter a trade with a small amount of you assets and have your liquidation point far from your entry or do an entry with a larger amount and have your liquidation point closer.
Leverages doesn't affect the the liquidation point much because the amount of your assets in your futures acount affects your liquidation point for example you can take a trade of 5 usdt with 20Ć leverage or take a trade of 1 usdt with 100Ć leverage it's the same thing and same liquidation point
With cross you can easily do DCA (Dollar cost averaging) on a trade and as u keep adding on the same trade the entry comes closer and liquidation point comes closer coz u are increasing on your margin.
ALSO one winning trade can help you protect a loosing trade because as the winning trade keeps adding on your assets (increasing on ur usdt) and if the entry is bigger than the lossing trade u will find that the liquidation point of the loosing trade will keep extending further or stay constant.
That's it for cross
Lets see which margin mode is preferable.... for beginners I would recommend isolated since it only affects the amount on your position and you will have more chances to try as you learn
But if you have mastered your trading, cross would be more preferable and with cross u can play around with leverage such that u can do more entries.
That's it with margin mode tomorrow we shall go a head to talk about asset modes
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