Frequently asked questions from beginners starting with futures trading are which one should I choose. I started with the same mindset initially and then realized that isolated margin is often a safer option. But understanding why this is the case is important.

Let's go through a scenario. Suppose I have $200 in my futures wallet. The price of coin X is $1,000, and I want to open a position with $100 margin using 10x leverage. When I do this in isolated mode, I open a position equivalent to 1 coin of X, which is $1,000. The key point here is: I only risk my $100, and the remaining $100 stays untouched.

The liquidation level reaches $900. Why? Because when coin X drops 10%, my $100 is gone, and my position is liquidated. But the critical advantage here is: I only lose the $100 I opened that position with, and the other $100 in my futures balance is unaffected. Instead of losing my entire balance during sudden volatility or bad news, I only lose that specific position.

Now, if I wonder what cross margin is? If I open the same position in cross margin mode, my liquidation level drops to $800. Why? Because now my entire $200 balance is at risk in that position. The advantage is: if coin X drops from $1,000 to $850 and then rises back to $1,100, I recover before hitting $800, and my position won't be liquidated. I end up with a $100 profit. But in isolated mode, I would have already been liquidated and lost $100 when it reached $900.

In summary, in cross mode, the risk is higher but the liquidation level is farther away. In isolated mode, the risk is more controllable but liquidation is closer. The answer to what is cross margin is essentially this: using your entire balance in one position, which offers high profit potential but also high risk.

Also, in isolated mode, if you want to extend the liquidation level of a position, you can add margin by pressing the plus button in the margin section. When opening multiple isolated positions, each one stands on its own and doesn't affect the others. But in cross mode, all your positions influence each other, and in profit/loss situations, they all draw from the same balance pool.

Which mode suits you more depends on your experience and risk tolerance. Initially, isolated seems safer, but it's beneficial to consider the advantages of cross margin as well. You can try both modes on Gate and see which one you adapt to better.