The vicious cycle of losing money in the futures market, honestly, is not about a lack of understanding, but rather being strangled by layer after layer of hidden costs. Many traders around me have encountered the same predicament: right after opening a position, the market moves against them; they grit their teeth and close the position, only to see the predicted trend start right on time; even when they get the direction right, their capital keeps shrinking. After years of navigating the crypto world, I want to say—there's much more depth to futures trading than you think.

Futures are essentially a betting game, with the exchange setting the rules. Every penny you earn comes from other traders' liquidations. It sounds brutal, but this is the reality.

**Funding Rates Are the Real Hidden Killers**

Funding rates might be the easiest trap to overlook. Many people treat it as a fee, but that's not quite right—it is the core balancing mechanism of the perpetual contract market. When the contract price diverges from the spot price, funding fees help realign them.

The rule is simple: when the rate is positive, longs pay shorts; when negative, shorts pay longs. This actually reflects the market sentiment of bullish or bearish traders. But there's a critical point—funding rates can directly erode your profits.

Here's a practical example. Suppose the funding rate is 0.05% per 8 hours. Holding a Bitcoin long with 100x leverage, you would pay about 1.5% in funding costs daily. If the price moves sideways or slightly down, these hidden costs can quickly eat up your margin. You might find that even with the correct market direction, you can't escape this slow bleed.

My experience is: when one side's funding rate exceeds 0.12% for two consecutive days, it indicates the market is overly crowded. Continuing to chase risk at this point is basically gambling against the odds.