Future in crypto and related concepts such as Isolated, Cross mode, leverage, and how to manage risk:
1. Isolated and Cross Mode
Isolated Margin:
When you place an order, the amount you deposit (e.g.,
$1,000) will be the maximum amount you can lose.
If the price drops to the liquidation level, you only
lose the exact margin amount, without affecting the rest of your
account.
→ Helps manage risk better,
without burning the entire account.
2. Cross Margin:
The entire Future account balance (e.g., $3,000)
will be used to hold the order.
If the price goes strongly in the opposite direction, you may burn the entire account.
✅ Tip: Choose
Isolated mode to limit risk.
3. Leverage - x5, x10, x20,...
Leverage allows you to trade with a larger amount of money than your actual capital.
For example, if you have $100, using x5 leverage means you can trade an order worth $500.
Using x10 leverage, you only need $100 to open an order worth $1,000.
However, if the price fluctuates even a little, you can be liquidated:
x5 leverage → a 20% price drop results in liquidation.
x10 leverage → a 10% price drop results in liquidation.
x20 leverage → a 5% price drop results in liquidation.
✅ Quick Calculation:
Percentage price drop that causes liquidation ≈ 100 / (leverage level)
⚠️ 3. Note on high leverage (x30, x40...) When using too high leverage:
The exchange may limit the amount of money allowed to hold the order, only using ½ or ⅔ of the money to hold the order.
The rest is deducted as an insurance fee and is not used to hold the order.
It's easier to be liquidated and there's no chance of recovery.
🔁 Conclusion & Advice
Always choose Isolated mode to avoid burning the entire account.
Use moderate leverage (x5 – x10) to have a chance to hold the order.
Carefully calculate the liquidation point based on leverage.
Avoid too high leverage if you don't have experience.
Liquidation point calculation table for each leverage level and a simple illustration for you to easily visualize
✅ Illustrated Tip
If you trade with little capital, using x5 → moderate risk, easy to manage.
Using x20–x100 is only for ultra-short-term scalping and is very risky.
You should use Isolated Margin to avoid losing your entire account.