Isolated Margin

Isolated margin is a leverage mode where each position has its own locked pool of collateral. If the position is liquidated, only the margin posted for that specific position is lost; the rest of your account balance is untouched. Isolated margin is the recommended mode for new traders and for any high-leverage position, because it bounds the maximum possible loss on any single trade to the posted margin.

Why isolated margin matters

Risk management is the practice of controlling the worst-case outcome of each individual trade. Isolated margin makes the worst case literal: if you post $500 of margin on a 10x BTC long and the position liquidates, you lose $500 and the rest of your balance is intact. There is no scenario where a single bad trade can drain your full account. Compare this to cross margin, where a single losing position can draw on every dollar of available collateral, and the worst case for one trade is the worst case for your entire account.

Isolated vs cross margin

Cross margin shares a single collateral pool across all open positions. The advantage is that you can survive larger temporary drawdowns on any one position by drawing on collateral from other positions. The disadvantage is that a single severe adverse move can liquidate everything at once. Isolated margin sacrifices that shared collateral cushion for hard isolation: a position that goes wrong cannot affect other positions. Experienced traders sometimes use cross margin on positions they have high conviction in, but the cost of being wrong is much higher. Hex37 supports both modes; isolated is the default and the right starting point.

Isolated margin and position sizing

Under isolated margin, the standard 1% risk-per-trade rule becomes a clean ceiling. If you post 1% of your account as isolated margin on a high-leverage position and the position liquidates, you lose exactly 1%, no more. Your account survives any single liquidation. Over a long enough horizon, this discipline is the difference between traders who compound and traders who blow up. Cross margin breaks this clean accounting: under cross, a single severe drawdown can liquidate multiple positions and consume far more than 1% of the account.

When to consider cross margin

• When you have multiple positions on correlated instruments and want to share collateral so a short-term drawdown on one does not liquidate the others.
• When you are hedging (one long, one short on related instruments) and want the hedge to share margin.
• When you have a high-conviction directional trade and want to give the position room to survive temporary drawdowns at the cost of higher account-wide risk.
• Otherwise, stay isolated. The clean per-trade risk accounting is worth more than the marginal collateral efficiency.