Before you take any trades in the futures market, you must first decide the margin mode. If you choose Isolated margin mode, it means that you want to isolate a certain portion of your account balance for the trade you intend to take, hence the name “isolated margin”. If you don't understand what I am saying, well, to isolate means to separate or set apart from, so if you apply the isolated margin mode, it means that you are separating a portion of your account balance for a trade. Let's say you have a $500 account balance and decide to isolate or use just $50 from it as margin to open a position, what this means is that only this $50 would be at the risk of liquidation, the remaining balance would not be affected, so isolated margin mode protects your capital because if the trade goes south, only the $50 would be lost. 

It is possible to open multiple positions in isolated margin mode and in this case, each trade would have its own margin and the account balance would still not be at risk

CROSS MARGIN MODE 

However, in cross margin mode, margin is not isolated which means that the entire account balance is used as support for any open positions or you could say; as collateral. Say you have a $500 account and decide to use just $50 as margin for a trade, if the trade goes wrong, you would lose that initial margin, but the balance on your account would be used to hold your trade . Do you now see why this could be risky?😂. If the trade keeps going bad, your margin balance or account balance will keep serving as support until it can no longer suffice, and this happens when what you have left in your balance falls close to or below what is called the “maintenance margin”, which results finally in the liquidation of your account. Want to know what maintenance margin is?, let's discuss that in the next episode of this course.

Also, you can open multiple positions in cross margin mode but it still doesn't change the fact that your entire account balance would always be at risk.

At, this point, you might think that cross is more dangerous to use, but that is not exactly true because with proper risk management, you can use It effectively to lower the risk of liquidating your account, hence the decision on which to use; Isolated margin or cross margin depends on your risk management strategies, preferences and level of knowledge.