Perpetual Contract Funding Rate: The Secret to Making Money Worth a SU7
For friends trading contracts, today let's talk about some real stuff!
Understanding the funding rate can help you lose less money,
or even make a little profit. Come, find a seat, and let me explain slowly~
1. What exactly is the funding rate?
In simple terms, it's the "toll fee" charged by the exchange to balance both sides.
For example, if you use 10x leverage with 10,000 USDT, it nominally means you're playing with 100,000 USDT.
If the rate is 0.1%, you would have to pay a "toll fee" of 100 USDT every 8 hours.
Here’s the key point: this money isn't going to the exchange; it goes to the counterparty!
If the longs make a profit, they have to share with the shorts, and if the shorts make a profit, they also have to share with the longs.
2. Understand the positive and negative rates
This is especially important! Remember:
If the rate is positive: longs pay shorts
If the rate is negative: shorts pay longs
Getting this wrong can lead to huge losses! I've seen many beginners doubt life because of this.
3. Common pitfalls for beginners
The first pitfall: trying to arbitrage at the last moment
Exchanges have a delay of 15-30 seconds; do you think you can profit in the last second?
The result is often a counterattack! I've tried it 10 times, and lost money 8 times.
The second pitfall: trading meme coins
Coins like $MAGIC can fluctuate 4% in 5 minutes,
and your funding rate earnings won't even cover the gaps!
The third pitfall: diving in when the rate is too high
If the rate exceeds 0.3%, be careful; this often signals a change in trend.
I've found that 80% of the time, there will be a sharp drop within 24 hours.
4. Genuine advice for beginners
Start with a small amount to test the waters; don’t go all in right away.
Prioritize trading mainstream coins like BTC and ETH.
Set funding rate alerts; don’t wait until you lose to find out.
Don’t let your position exceed 5% of your total funds.
Pay attention to the relationship between open interest and funding rates.
5. Advice from experienced traders
Honestly, trying to make money from funding rates isn't that easy! Those professionals:
Hedge across multiple exchanges
Monitor with programs 24/7
Adjust positions anytime
For ordinary people, it’s more reliable to study trends.
Remember my words: in the crypto world, surviving long is the real skill!
You can't earn all the money, but if you lose all your capital, it’s truly game over~
I am Yanshen, specializing in short to medium-term contracts and medium to long-term spot layouts, sharing investment techniques daily, detailed strategy teaching at @衍神 . Come on!