Last week, the backend received a private message from a fan, saying they accurately predicted the upward trend of a certain cryptocurrency. However, after holding the position for four days, not only did they not make any money, but they also incurred a significant loss due to a 'mysterious fee'. In the end, their position was directly breached by a sudden K-line - after the liquidation, the market immediately took off in the direction they had predicted, causing their mindset to collapse on the spot.
To be honest, I receive no less than five or six scripts every week that go like this: 'the direction was right, but the money is gone'. Many people always think that contract trading fails due to market judgment. In fact, the real 'slaughter knife' has never been the K-line, but those 'invisible arrows' hidden in the trading rules. Today, I've broken down the three major pitfalls that are the easiest to fall into, which are all valuable insights from practical experience. Remembering at least can help you save five digits in mathematical fees.
Trap One: Funding Fees - a 'profit thief' more exhausting than the market.
Most newcomers focus solely on the candlestick chart while completely ignoring the 'funding fees,' which are an invisible cost. It is not collected daily but is settled every 8 hours, with the core logic being 'market sentiment determines who pays whom.' Simply put, when the direction you are taking aligns with the current mainstream market position, you need to pay the person holding the opposite position.
I've seen the most exaggerated fans; when going long on a popular cryptocurrency, they encounter an overwhelming bullish market sentiment, and the funding rate skyrockets. After holding the position for three days, the funding fees alone consumed nearly 2000 capital, and when the market finally rises, the profit is not enough to fill the previous hole. This is why I say 'even if the direction is right, you may still be working hard for nothing.'
My pitfall avoidance suggestions: ① Always check the real-time funding rate before opening a position, avoiding periods when the rate exceeds 0.1%; ② Try not to hold overnight for short-term trades, especially not past the funding fee settlement point; ③ If the trend is clear, prioritize selecting the direction that 'receives funding fees,' for example, if the market is predominantly bearish, go long; you can earn from both the market movement and the fee rate.
Trap Two: Liquidation Price - what you calculate and what the platform calculates are not the same line.
The most common mistake beginners make is 'calculating leverage': thinking that 10x leverage means liquidation occurs at a 10% drop, but they are liquidated at a 5% drop. Where's the problem? The platform calculates the liquidation price by adding in transaction fees, slippage buffers, and other factors, making the actual liquidation line 3%-5% lower than what you calculated yourself. In extreme market conditions, it may be further advanced.
Previously, a fan shorted with a full position at 10x leverage. Even though the market only rose by 6%, he received a liquidation notice. Later, upon checking the records, he found that the platform, considering transaction fees and the market's volatility buffer, triggered the actual liquidation line when the market had risen by 5.2%. This kind of 'wrong calculation of the line' liquidation is even more frustrating than seeing the market go against you.
My key points for prevention: ① Never go all in! Full position mode has too much risk exposure; prioritize using isolated margin mode, where losing a single position does not affect other funds; ② Don't be greedy for high leverage; 3-5x is the most cost-effective range, effectively amplifying profits without letting risks spiral out of control; ③ Ensure at least 10% buffer space for margin, leaving a 'way out' for market fluctuations.
Trap Three: High Leverage - it's not a 'get rich quick tool,' it's a 'quick zeroing tool.'
Many platforms are now promoting 'hundred times leverage,' but I must say: unless you are an ultra-short-term expert, don't touch it at all. What does hundred times leverage mean? A 1% market fluctuation will lead to liquidation, and transaction fees and funding fees are calculated based on leverage - if you open a hundred times position with 100,000 capital, the transaction fees alone could reach 500 capital. Even if you are right in direction, a small pullback may wipe out your transaction fees first.
I've seen too many people open high leverage with a 'let's take a gamble' mentality; as a result, they either make a little money and run away, or they are correct in direction but get stopped out by volatility, and in the end, they still lose. High leverage is never meant for ordinary people to 'get rich,' but rather a tool for the platform to accelerate capital turnover.
My usage principles: ① High leverage is only suitable for 'second-level trading,' entering and exiting quickly to profit from price fluctuations, and positions should never exceed 10 minutes; ② For long-term layouts, leverage must be reduced; 1-2x leverage may earn slowly, but it can withstand market corrections and hold onto major trends; ③ Remember: the market is not afraid of you making money, but it is afraid you understand the rules - the more you understand leverage, the less likely you are to be greedy for high multiples.
Finally, I want to tell everyone: the market never 'targets' anyone; what truly causes you to lose money is ignorance of trading rules. Many people just entering the market think about 'going all in to get rich' but haven't even understood the most basic funding fees and liquidation prices. This is not a game; it is giving away money.
If you really want to survive in this market for the long term, remember this: first understand the rules, then place your orders. There will always be opportunities in the market, but once your capital is gone, it's really gone.
