Reduce risk and increase trading success with isolated margin

In Trading, Product

On Liquid, we want all traders to be able to easily and effectively manage their risk, particularly when trading on leverage. That’s why earlier this year we introduced the option to choose your margin type between cross margin and isolated margin.

More than 80% of traders on Liquid use only cross margin, accounting for more than 97% of all margin and CFD volume on the platform. But did you know that isolated margin could help lower your risk when trading on leverage?

Consistently successful cryptocurrency traders take risk seriously. They rarely, if ever, take chances. In the long run, discipline wins – and using isolated margin can help.

First, what’s the difference between isolated margin and cross margin?

  • Isolated Margin is margin placed into a single position that is completely isolated from all other positions.
  • Cross Margin is margin shared between all open positions using the same funding currency. Available margin is your current available wallet balance.

Isolated margin

Take your trading to the next level

Most traders on Liquid use cross margin, but isolated margin could give you the edge you need to take your trading to the next level.

There’s no obligation to use one or the other – both types of margin have their merits. Your margin choice should be solely based on your trading strategy.

Why should you use isolated margin?

Lower risk

Isolated margin limits your losses. In many cases, it’s the safer choice as margin comes from your wallet, isolated from the rest of your account balance. If a trade goes wrong your entire holding is not at risk.

With cross margin your entire balance is being used as margin. Without stop losses in place your trade exposes your entire holding to the trade. If it goes wrong, you could lose it all.

Flexibility

Control your risk with pinpoint precision. You are in command of the amount of margin exposed to the trade, so you have total say on the risk of your position.

Once a trade is live, you’re free to increase your margin amount on the trade if you need to.

How to use isolated margin

It’s super simple. Once you’re on the margin trading section of Liquid, you will see two margin choices at the top of the order form.

order form

Click Isolated. Keep in mind that to use isolated margin you must fund your trade with the quote currency. For example, if you are trading BTC/USD, you must use USD.

Once you open a position, you can add to your margin in the position manager.

And with that, you now know the basics of why isolated margin can be a great support for your trading activities. Ready to put your knowledge and skills to the test? Margin trade on Liquid with up to 25x leverage. 

New call-to-action

This content is not financial advice and should not form the basis of any financial investment decisions nor be seen as a recommendation to buy or sell any good or product. Trading cryptocurrency is complex and comes with a high risk of losing money, particularly if you trade on leverage. You should carefully consider whether trading cryptocurrencies is right for you and take the time to learn how trading works and decide how much money you are prepared to lose.

WRITTEN BY

Liquid

Providing liquidity for the crypto economy.