Continuing from the previous post, about contract tips, since I mentioned earlier that I would share a contract tip, of course this tip is aimed at beginners, experts please supplement, without further ado, that is to look at the funding rate. Let’s first understand what the funding rate is.

What is the funding rate? For better understanding, I don’t want to use the official explanation. Simply put, the funding rate is the 'adjustment fee' given between the 'long position' (buyers) and 'short position' (sellers) in perpetual contracts at regular intervals. The core purpose is to prevent the contract price from deviating too much from the spot price.

Since perpetual contracts have no expiration date, if the contract price is consistently higher than the spot price (everyone is frantically buying long), the 'long position' (bulls) will pay the 'short position' (bears)—equivalent to cooling down the bulls, encouraging more people to sell short, bringing the contract price back near the spot price; conversely, if the contract price is consistently lower than the spot price (everyone is frantically selling short), then the 'short position' (bears) will pay the 'long position' (bulls), guiding more people to buy long, bringing the contract price closer to the spot price. Generally, this occurs every 8 hours, and the money is transferred directly between the accounts of both parties, you don’t have to operate manually, you just need to know: whichever side is hot in the market is likely to pay the other side.

After understanding the funding rate, based on my experience, this tip is that when the funding rate remains positive, it is likely to drop; when it remains negative, it is likely to rise. This tip can be kept for reference verification without investing yet, and I hope my followers will not be harvested. But also be aware that some project parties or manipulators may create a 'bullish illusion' through high funding rates to attract retail investors to go long before dumping. For example, the TRB contract once sparked controversy over 'inducing long positions' due to high funding rates, leading to a large number of bulls being liquidated.

Finally, be sure to pay attention to these perpetual contracts without spot, such as the current myx and m; I do not recommend trading these two coins. The reasons can be referenced in the previous post; you must trade similar coins and do not buy long below 20U; the reason not to buy too much is that it easily attracts the attention of manipulators, who may harvest you.

If this is useful, please follow, typing is not easy, thank you! I hope my followers will not be harvested and can make money.