Is Isolated Margin VS Cross Margin the Key to Avoiding Liquidation? Choosing the Wrong Position Can Lead to Tears! 🦄

In the cryptocurrency leverage trading world, "choosing isolated margin or cross margin" is a life-or-death question! On August 25, market fluctuations increased, and many people faced liquidation due to wrong position choices. Veteran trader Garry explains the core concepts in simple terms to help you avoid pitfalls.

💵1. Core Differences: Isolated Margin "Protects Life by Splitting Positions", Cross Margin "Life or Death Determined by One Position"

Comparison Dimensions: Isolated Margin Model | Cross Margin Model

Margin: Single Contract Independent | Shared Account with All Funds

Liquidation Impact: Only Losses on Single Contract, No Impact on Others | Entire Account May Face Liquidation Risk

Risk Isolation: Strong | Weak

Capital Utilization Rate: Low | High

💵2. Isolated Margin: The First Choice for Beginners to Protect Their Capital, While Experienced Traders Find It Restrictive

Advantages: No Cross-Liquidation (If SOL Position Liquidates, BTC Position is Safe), Risk Transparency (Know Maximum Loss When Opening Position), Small Capital (Less than 50,000 U) is Friendly for Experimentation. In 2024, during the ETH Flash Crash, beginners relied on it to protect their principal. Weaknesses: Idle Capital, Complicated Operations, Not Suitable for Large Capital Trend Trades.

💵3. Cross Margin: A Profit Tool for Experienced Traders, A Zero-Return Trap for Beginners

Advantages: Maximum Capital Efficiency (Small Capital Leverages Large Positions, Earnings are 2-3 Times Higher than Isolated Margin When BTC Rises by $20,000), Strong Against Volatility (Trend Trades Can Withstand Short-Term Corrections), Simple Operations, Suitable for Experienced Traders Focused on 1-2 Cryptocurrencies. Weaknesses: No Risk Isolation (If One Position Liquidates, All Positions Collapse, Many Went to Zero During the FTX Collapse), Easily Wipe Out All Funds.

💵4. How to Choose on 8.25? Match Yourself

Beginners / Small Capital: Choose Isolated Margin, Engage in 1-4 Hour Short Trades; Experienced Traders / Trend Followers: Use Cross Margin, Open Positions with Only 1/3 of Funds, Set 5%-8% Account Stop Loss; Multi-Currency Traders: Must Choose Isolated Margin.

💵5. Garry's Iron Rule: Stop Loss First + Position Not Exceeding 1/3

Want to know which position suits you? Need BTC, SOL Real Trading Strategies? Follow Garry, a ten-year veteran who will help you avoid liquidation pitfalls!