Isolated Margin refers to a margin system where margins are not shared across symbols but instead allocated to each individual position.
- The margin allocated to trade is independent of other positions or the overall account equity.
- Each position’s margin is ring-fenced, so profits or losses in one position do not affect the margin or equity of other positions.
- This system allows you to limit potential losses to the margin allocated to each trade.
Example: If you allocate a specific margin to each position, the risk is contained to each trade independently, providing better risk management but requiring careful margin management for each position.