2026-01-16 09:29:19

Why is it so easy to lose money in contract trading? Many people think it's due to misjudgment, but in fact there is a complete mechanism working behind the scenes to sabotage you.

The most heartbreaking example is like this: you correctly predicted the direction and held the position for four days, but the market didn't blow you up; instead, the funding fee was steadily deducted by 1000 USD. After liquidation, the market suddenly took off in the opposite direction. That feeling is even more painful than losing money directly.

And the culprit behind all this is the so-called "funding rate" in perpetual contracts.

**How does the rate eat up your money**

Perpetual contracts settle funding fees every 8 hours. The rule is simple: when the rate is positive, long positions pay short positions; when negative, the opposite. This mechanism was originally designed to balance longs and shorts, but if you're fully long and the rate stays positive for a long time, your account is like a faucet constantly leaking money. The direction is correct, but the money is secretly flowing away.

**How to avoid this trap**

You must check the funding rate before trading. 0.01% is usually a reasonable benchmark. If it exceeds this, it indicates the market is a bit overheated, and the cost of going long is significantly increased. If you're not holding a medium- to long-term position, high funding rates are simply not cost-effective.

Position holding period also matters. For intraday short-term trades, the impact of the funding rate is relatively small; but if you plan to hold for several days, you need to carefully account for this cost. A 0.05% rate over three days could mean an invisible cost of 0.15%. It may seem small, but it can easily eat into your profit margin.

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DeFiCaffeinator

· 8h ago

It's outrageous that you can still be drained by fees even when you're on the right track. The contract is really full of tricks.

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LightningPacketLoss

· 8h ago

Being exploited by fees even when betting on the right direction—that's true despair.

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MetaMuskRat

· 8h ago

Damn, the funding fee thing is really an invisible knife. If you choose the right direction, you still get cut. If you choose the right direction, you might actually be worn down by the rate itself. This kind of despair is indeed more painful than a direct liquidation. Holding a full position and going long during a period of continuous positive rates is a dead end; there's no way to avoid it. By the way, developing the habit of watching the rate is necessary, or you'll just be chopped up like a leek. Short-term trading is easier to handle; the funding costs for holding positions for a few days can really eat up all the profits. 0.05% over three days is an invisible 0.15%. It doesn't sound like much, but it's already quite outrageous. This perpetual contract mechanism is like this — it slowly takes money out of your pocket before blowing you up. This explanation really hits home. I guess there will be a bunch of stories of people being worn down and losing everything.

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BearMarketMonk

· 8h ago

Being forcibly liquidated by fees even when correctly predicting the market direction is the ultimate. --- Funding rates are just toll booths for the market makers; after a round, your pants are almost pulled off. --- I've always said that full positions are a death sentence, but some people just have to try. --- A 0.01% benchmark sounds insignificant, but when it hits your actual account, it's a harsh reality. --- When the fee rate is favorable, you shouldn't be opening long positions. Isn't that common sense? --- Holding a position for four days was forced to liquidation by fees; only those who have experienced it know how it feels. --- Short-term trading is manageable, but if you plan to hold for a few days, you need to consider whether this hidden cost is worth it. --- Contract trading is essentially a battle against the system's mechanisms; most people simply can't win.

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TokenToaster

· 8h ago

Getting the direction right and still being wiped out by funding fees and liquidation—this trick is truly unbeatable. The moment the market takes off in the opposite direction is probably the most emo time. Funding rates are like an invisible Grim Reaper; going all-in long is really a suicidal move. So, for short-term trading, don't focus on contracts with high fees; it's not worth it. Previously, I didn't calculate the fee costs properly and got wiped out of half my profits after just three days. I'm convinced.

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MetaverseHomeless

· 8h ago

The direction was correct, but the money is still gone. That's the most incredible thing about perpetual contracts.

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RugPullAlarm

· 8h ago

Fees are like an invisible trap set by exchanges for retail traders. The data is right there—starting from 0.01%, you should be alert. Full-position gamblers need to wake up. Spotting the right direction is just the beginning; the real danger is the cost. Missing out on 1000U in four days? That's basic knowledge of capital flow analysis. You need to learn how to track fee rate changes. Holding a position with high fees is like committing suicide. A hidden cost of 0.15% over three days may not seem like much, but it can easily eat into the entire profit—numbers don't lie. Stop blaming the market. The real issue is that you haven't fully understood the contract mechanism—that's true risk.

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