What is funding in simple words for my ❤️ Friends and Followers!
Imagine there are swings. On one side, many children are sitting, and on the other side, there are few. To prevent the swings from tipping over, the children on the heavy side must pay a little candy to those sitting on the light side.
So it is in crypto:
If almost everyone wants to buy (long), they pay those who are selling (short).
If everyone wants to sell (short), they pay those who are buying (long).
These candies are the funding.
Why is this done? To always maintain balance on the swings and ensure the crowd doesn't tip too much.
The main thing to remember for a newbie:
Never jump into positions just for funding. It's a bonus, not the main strategy.
Funding is not just a number on the terminal. It's a tool that shows where the crowd is and where the smart money is. And if you learn to read it correctly, you can not only avoid traps but also profit from imbalances.
Funding is not a gift, but part of the rules of the game.
The crowd almost always loses, while those who can wait and sit on the 'light side of the swings' receive bonuses.