When I helped fan Akai review that day, he was shaking while staring at the settlement sheet: 'Bro, ETH clearly rose 15%, but my long position got liquidated...' After checking the records, he realized that the funding rate had eaten away 1280 USDT over 4 days, and before liquidation, his account only had 32 USDT left, while ETH soared after closing — this wasn't bad luck, he fell into three 'rule traps' set by the exchange.
The truth of contract trading is: You think you’re competing with the market, but in fact, you’re battling the exchange's rules. I’ve guided five similar fans, relying on these three escape techniques, they can now avoid being harvested by fees, one even turned from the edge of liquidation to 50,000 USDT. Today, understanding these 'hidden rules' and coping strategies can at least help you minimize losses by 80%.
Hidden rule 1: The funding rate is the 'team tax,' if it’s positive for three consecutive times, you should run
The culprit of Akai's liquidation was the funding rate. He did not know these three truths:
① When the fee rate > 0.1%, longs are just waiting to be cut like leeks
The funding rate is charged daily at 8 AM, 4 PM, and midnight. A positive rate means longs pay shorts (for example, 0.15%, a 10,000 USDT position pays 15 USDT). Akai opened a 40,000 USDT ETH long position, and the rate was continuously 0.12%-0.18% for 4 days, meaning he paid 1280 USDT in fees, equivalent to losing 3% daily, plus slight fluctuations, it’s a wonder he didn’t get liquidated.
Escape technique: Check the funding rate curve before opening a position
I let my fans check OKX's 'funding rate history' before opening positions every day. If the funding rate is > 0.1% for two consecutive times, I resolutely avoid going long (the same for shorts, avoid shorting when consecutive negative rates appear). Akai learned this trick later and avoided 5 high funding rate traps, saving over 600 USDT.
② Holding a position for over 8 hours can eat away half of your profits
Contracts are not spot trading; the longer you hold, the more you lose. For example, with 10x leverage opening a 10,000 USDT long position and a fee rate of 0.1%, paying three times a day totals 0.3%, after 8 days that’s 2.4%, equivalent to working for free for 2 days. Akai’s trade could have made 800 USDT, but all was consumed by fees.
Escape technique: Do 'short, flat, and fast' to avoid fees
Now I lead fans in trading, and holding positions never exceeds 8 hours, just avoiding three instances of fee charges. If the trend is good, I close the position and reopen, effectively 'pausing the fees.' Akai used this trick, reducing fee expenses from 300 USDT daily to 50 USDT.
③ Limit orders save 30% on slippage fees compared to market orders
Many people use market orders to open positions, thinking the difference isn’t much. In fact, the slippage + fees for market orders are 30% higher than limit orders. Akai had a 40,000 USDT position and used market orders too much, spending an extra 240 USDT over 4 days, equivalent to paying fees twice more.
Practical operation: Limit order hanging techniques
Place buy orders 0.5% below the current price and sell orders 0.5% above, there’s a high probability of execution. Even if it doesn’t execute, it’s better than paying extra slippage fees — this trick saves fan Old Zhou 1500 USDT every month.
Hidden rule 2: Liquidation price is closer than you calculate; with 10x leverage, a 5% drop results in liquidation
Akai always thought that 10x leverage needed a 10% drop to get liquidated, but he miscalculated the liquidation formula:
① Liquidation price = Opening price × (1 - 1 / Leverage) + Liquidation fee
For example, with 10x leverage opening a long position at 2000 USDT, the theoretical liquidation price is 1800 USDT (a 10% drop), but with 0.5%-1% in liquidation fees, the actual liquidation price is between 1850-1880 USDT, a drop of 5%-7% results in liquidation! Akai’s ETH position was liquidated when it dropped to 1860 USDT, which was 140 points earlier than he expected.
Escape technique: Manually add 3% margin
After opening a position, add 3% margin in 'position management,' which will significantly push back the liquidation price. For example, with 10x leverage on a 10,000 USDT position, if you add 300 USDT margin, the liquidation price changes from 1850 USDT to 1800 USDT, allowing you to withstand a 50-point fluctuation — this trick saved fan Xiao Lin three times.
② Full margin mode is a 'chain bomb', only isolated margin can protect principal
Akai used the full margin model; one position's liquidation wiped out the entire account of 50,000 USDT. If he had used isolated margin, the liquidation would only have lost the current position’s margin, and the other funds would remain safe.
Must change settings: Always use isolated margin
Now all the fans I lead use isolated margin. Even if they get liquidated, the remaining money can make a comeback. Old Zhou liquidated three isolated positions last year, each time losing only 500-800 USDT, and finally turned the remaining funds back into 30,000 USDT.
Hidden rule 3: 100x leverage is a 'short-term trap,' holding positions for over 1 hour will definitely incur losses
Many people are addicted to the thrill of high leverage but do not know:
① The fees for 100x leverage are 10 times higher than for 10x leverage
Fees are calculated based on the leveraged position; for 100x leverage with 1000 USDT margin, the actual position is 100,000 USDT, making fees 10 times higher than for 10x leverage. Fan Xiao Zhang spent 2300 USDT on fees over 3 days while using 100x leverage for 5-minute trades, which was more than his profits.
Escape technique: Leverage is inversely proportional to holding time
100x leverage: Only trade on sudden market movements within 5 minutes, earn 1%-2% and run away
5-10 times leverage: Hold positions for 1-4 hours, capture waves
3 times leverage: Hold positions for 1-3 days, do trend trades
Akai now only uses 3-5 times leverage, reducing fees from 200 USDT daily to 30 USDT.
② High leverage + overnight = Giving money to the exchange
Holding 100x leverage positions overnight can eat away 5% of the principal just from funding rates + fees. A newbie opened a position with 100x leverage and forgot to close it, facing an overnight fee of 0.8%, which wiped out the margin completely.
Iron rule: Clear positions before the daily market closes
Close all high leverage positions before 10 PM daily; it’s better to reopen the next day than to risk being harvested by overnight fees. This trick saved fan Xiao Wang 12,000 USDT.
The last line of defense: Use only 50% profits for rolling positions, keep 50% for survival
Even if you understand the rules, don’t use full margin for rolling positions. I now lead fans using a 'half rolling method':
After the first trade is profitable, withdraw 50% of the profit to a cold wallet (for example, if you earn 10,000 USDT, withdraw 5,000 USDT)
Use 50% of the remaining profit to open a new position with 3x leverage, set a stop loss at 3%
Immediately close a new position if it loses over 3%, never add to a losing position
Akai used this trick to gradually earn back the previous loss of 12,000 USDT, and now his account is stable at 28,000 USDT. He said: 'I used to think contracts were about gambling, but now I understand it’s about battling the exchange’s rules; only by winning the rules can you make money.'
A survival checklist for contract newcomers
By following this table, you can avoid at least 80% of rule traps:
It is better for a team to identify key points in advance than for one person to guess support levels while staring at the candlestick chart; on the edge of liquidation, it’s better to have someone say 'close half of the position first' than to grit your teeth and endure it alone. There’s no need to get used to the pain of fighting alone. We explore the direction, we control the risk, you just follow the rhythm. I’ve always been here, waiting for you to sail away together.
If you lack execution power, consider following @bit多多 to learn from Duo Duo. Remember: Akai's liquidation wasn't bad luck, it was because he didn’t understand 'the opponent in contracts isn't the market, it's the exchange's rules.' By learning these escape techniques, you'll find that not being harvested means you are making money.
The highest state of contract trading is not how much market movement you grasp, but how to make the rules serve you — this sentence is worth ten lessons from liquidation.