Crossed or Isolated Futures? Learn about their advantages and risks before trading
🤔
When trading futures on Binance, you can choose between cross margin and isolated margin. Each has advantages... and risks you should know.
➕ 1. Cross Margin
What is it? Shares the entire available balance in the futures account to back a position.
Advantages:
Greater flexibility: if a position incurs a loss, it is backed by the total capital.
Lower risk of liquidation if you manage your balance well.
⚠️Risks:
If you don't close in time, you could lose ALL your available balance in the account.
Less control per trade.
✅2. Isolated Margin
What is it? The margin is limited only to the capital you allocate to that position.
Advantages:
Total control of risk: if it gets liquidated, you only lose what is allocated to that trade.
Ideal for more aggressive or high-leverage strategies.
Risks:
Easier to get liquidated if you do not manage leverage well.
The total balance is not utilized as backing.
Which to use?
Conservative traders or those with multiple open positions: Crossed.
Tactical traders with risk control per trade: Isolated.
Pro tip: you can combine both depending on the type of trade. Scalp with isolated, swing with crossed, for example.
