- This topic has 2 replies, 2 voices, and was last updated 3 days ago by
.
Can I add margin in isolated mode to avoid liquidation?
-
I came to the forum for advice because yesterday I almost went gray from stress over a single trade. Basically, I was trading on a calm market, opened a small Solana position, and went to get some coffee. When I came back, there was a sudden price drop, and my account lost much more than I allocated to that trade. It turned out the default was cross margin, and my position started “eating” free funds from my entire balance to avoid liquidation. I thought I was only risking the $100 I put in, but in the end my whole modest deposit was at risk.
Can someone explain how to set things up so that each coin “lives its own life” and doesn’t touch the rest of the balance? Also, if I use isolated margin, can I manually add more margin if I see the price about to reverse, or will the system still liquidate me at the first calculated liquidation price?
Certainly, many exchanges actually set cross margin as the default because you can keep a position open longer, nonetheless the possibility of losing the whole amount in one go becomes very large. When you’re in isolated margin mode, you’re basically limiting your loss to the amount you put in. If you really want to get the lowdown on these subtle differences, I’d suggest checking out isolated vs cross margin explained here on iTrusty on exchanges like Binance or Bybit. It turns out that in isolated mode, you have the option to add more margin manually so as to avert liquidation if you think a recovery is possible. My own view is that it is much better to place a stop-loss than trying to bail out a losing trade with more funds, as that is exactly when you lose more money. Hey, what level of leverage were you using? Did you have other open positions that might have affected your total collateral?
You must be logged in to reply to this topic.
