Recently, a fan contacted me, saying they were confident in their direction, but the order was held for four days, and in the end, they were charged 1000U in funding fees. After getting liquidated, the market surged, and their mindset collapsed.

In fact, this is not the market's fault, but rather your misunderstanding of the rules of contract trading. The truth of the contract is not simply about rises and falls, but rather some invisible traps. Many people fall into pitfalls because they overlook these details.
Today, I will reveal these common pitfalls to everyone. By avoiding them, your journey in contracts may become smoother.
The first pitfall: funding fees, quietly eating away at your profits.
Many people focus on the candlestick chart but overlook the impact of funding fees. The funding fee is charged every 8 hours, and the platform will charge fees based on the direction of your long or short orders.
If you go long and the rate is positive, you have to pay the shorts; if you go short and the rate is negative, the shorts have to pay the longs.
For example, you go long, the direction is right, but you hold the position for a long time, and after several days, you are charged several hundred U in funding fees. In the end, you get liquidated, and after closing the position, the market takes off.
Pitfall avoidance advice:
Avoid high fee rate time periods.
Control the holding time, preferably not exceeding 8 hours.
If the direction is clear, try to be on the side of the counter-trend funding fee.
The second pitfall: the liquidation price is not the line you calculated.
Many people believe that with 10x leverage, a 10% drop will result in getting liquidated, but in reality, a 5% drop can lead to forced liquidation. Why?
The platform will add a liquidation fee, and the actual liquidation price will be lower than what you calculated.
Solution:
Do not go all in, use the isolated margin mode to protect yourself.
Keep the leverage between 3 to 5 times to avoid high leverage risks.
Leave enough margin, extend the liquidation line, and give yourself more time to rebound.
The third pit: High leverage = Slaughter knife
100x leverage looks exciting, but there are significant hidden costs. The fees and funding costs are calculated based on the borrowed funds, so even if the direction is correct and you make a profit of a few hundred U, you might end up losing money at settlement.
Suggestion:
High leverage shorting, low leverage holding long.
The higher the leverage, the greater the risk. Don't act impulsively.
Exchanges are not afraid of you making money, they are afraid of you understanding the rules!
Many people think that contract trading is just about watching the market, but those who can make money are often the ones who understand these rules.
What contracts fear the most is not the market, but your lack of understanding of the rules.
It's hard to keep going in this market relying on just one person.
Now, I have a repaired road here, will you walk on it?

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