## Isolated and Cross Methods in Futures Trading: Which One Suits You?

When starting margin trading (Margin), understanding what **cross and isolated are** will help you manage risks more effectively. These two methods allow you to adjust leverage and manage margin in completely different ways. Choosing the right method will directly impact your trading strategy and your ability to control losses.

## Isolated - Per-Position Risk Control

The Isolated (isolated margin) method allows you to allocate a separate margin for each position you open. This means your positions are entirely independent of each other.

**How it works:**
When the margin of a position falls below the maintenance level, only that position will be liquidated. The maximum loss you can incur is the initial margin for that position. Calculation formula: Isolated Margin = (Number of positions × Average opening price) ÷ Leverage

**Specific example:**
You open a long position of 0.1 BTC on BTCUSDT at a price of 50,000 USDT, with x25 leverage. Required margin = (0.1 × 50,000) ÷ 25 = 200 USDT. If this position gets liquidated due to a price drop, you only lose this 200 USDT and it does not affect other funds in your Futures account.

**Advantages:** You can precisely control the maximum risk, and manage margin more flexibly by adjusting leverage.

## Cross - Sharing a Common Pool

The Cross (cross margin) method uses the entire balance in your Futures account as margin for all your positions. All positions share this common margin pool.

**How it works:**
In this method, you can open multiple positions simultaneously without worrying about individual margins. However, unrealized profits from profitable positions cannot be used as margin for other positions. Calculation formula: Initial Cross Margin = (Number of positions × Average opening price) ÷ Leverage

**Specific example:**
You open a long position of 0.1 BTC on BTCUSDT at 50,000 USDT, with x25 leverage. Initial margin = (0.1 × 50,000) ÷ 25 = 200 USDT. But with a account balance of 1000 USDT, this entire amount will be used as margin. If total losses exceed 1000 USDT, the account will be fully liquidated.

**Advantages:** This method is simpler and easier to understand, allowing you to optimize capital efficiency when trading multiple positions.

## Comparing Cross and Isolated

| Criteria | Isolated | Cross |
|---------|----------|-------|
| Margin | Separate for each position | Sharing the entire account balance |
| Maximum risk | Limited to initial margin | Can lose entire balance |
| Liquidation | Affects only that position | Affects the entire account |
| Management | Requires choosing margin per position | Automatically uses all available balance |

## Suitable Choices for Different Strategies

If you prefer strict risk control and want to limit losses to a fixed amount, **Isolated is a better choice**. This method suits high-risk trading strategies or when you want to evaluate the performance of each position separately.

If you want to simplify trading, open multiple positions at once, and are willing to manage risk at the account level, **Cross is more suitable**. This is an optimal choice for long-term trading plans and maximizing profits from profitable positions.

Understanding the difference between Isolated and Cross will help you develop effective Futures trading strategies aligned with your trading style.

**Note:** Cryptocurrency trading involves significant risks. You should fully understand these risks before investing.