Community Forex Questions
What is isolated margin mode?
Each trading pair has its own, separate margin account. The crypto that can be moved into, kept, and borrowed from an isolated margin account is specific. With a BTCUSDT isolated margin account, for example, only BTC and USDT can be accessed. All trade pairings are independent. If an additional margin is required, the account must be funded; it will not be supported automatically from other isolated or cross-margin accounts. Each isolated margin account carries its own risk. Until the account is liquidated, it will not impact other isolated accounts.
Isolated margin mode is a risk management feature used in margin trading, allowing traders to allocate a specific portion of their funds to a single trade. In this mode, only the assigned margin for that trade is at risk if the market moves unfavorably, protecting the rest of the trader's capital from being affected.
For example, if a trader designates $100 as isolated margin for a particular position, only that $100 is at risk, even if the overall account balance is higher. This contrasts with cross margin mode, where all available funds in the account can be used to prevent liquidation. Isolated margin mode provides traders with better control over their risk exposure, enabling more strategic and secure trading decisions.
For example, if a trader designates $100 as isolated margin for a particular position, only that $100 is at risk, even if the overall account balance is higher. This contrasts with cross margin mode, where all available funds in the account can be used to prevent liquidation. Isolated margin mode provides traders with better control over their risk exposure, enabling more strategic and secure trading decisions.
Feb 07, 2022 07:40