Playing with leverage in the crypto world, not understanding full margin and isolated margin can lead to instant liquidation. These two terms look like twin brothers, but the risks are vastly different—experienced traders control risks by switching modes, while newbies often get confused by the rules and end up losing. Today, I’ll break it down in simple terms, and you’ll know what to choose after reading.


Full margin: All funds tied together.

In full margin mode, all the money in your account (principal + profits) is consolidated into a 'capital pool', and all margin for positions is deducted from here.

For example: all the money in your wallet is shoved into one envelope; no matter how many orders you open, profits and losses are all taken from this envelope. If one order incurs a small loss, other funds can cover it; if one order makes a big profit, the risk-bearing capacity of all positions strengthens accordingly.

Advantages: Maximum utilization of funds. When the trend is clear (like a bull market), you can leverage the 'collective funds' to withstand small fluctuations, suitable for heavy investments to seek profits.

Pitfalls: A loss for one is a loss for all. If the market suddenly plummets (like high leverage facing a black swan), all positions will lose together, the capital pool may be instantly emptied, and you may even owe money.


Isolated margin: Each amount manages its own portion.

In isolated margin mode, each time you open an order, you allocate an independent margin, and profits and losses are only related to this amount. For example, if you allocate $1000 to Order A, even if Order A loses all and gets liquidated, the other funds remain unharmed.

For example: you separate your money into different envelopes, using one for US stocks, one for contracts, and one for spot trading; if one envelope’s money is lost, the other envelopes remain unaffected.

Advantages: Risk isolation is solid. When trying new strategies, playing high-leverage short-term, or practicing with small funds, even if one order collapses, it won’t lead to total defeat.

Pitfalls: Weak ability to withstand volatility. Because the margins are independent, if the market moves against you, without other funds to rescue, the order’s margin will be lost completely and lead to liquidation.


How to choose? It depends on how you want to play.

- Using full margin: Recognize the big trend (for example, confirm it’s a bull market), want to heavily invest to take advantage of large waves, use it when relying on a capital pool to withstand small fluctuations.
- Using isolated margin: Play short-term, try new strategies, afraid of losing the entire principal in one go, or want to set different leverage for different orders.

In simple terms, full margin is 'concentrating forces to accomplish big tasks', while isolated margin is 'dividing troops to guard against risks'. There’s no absolute good or bad; it depends on your current strategy and risk tolerance. Newbies are advised to start practicing with isolated margin, and once they have a good grasp, switch to full margin—after all, in the crypto world, staying alive gives you the chance to make money.

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