Introducing you to Perptual Futures! The secret to overnight wealth.

In the crypto world, a day is like ten years in the human realm. This saying has led many people to rush into the futures market with the fantasy of "getting rich overnight," only to become the "human fuel" for the exchanges. Today, I will strip away the glamorous exterior of futures in the most straightforward way, so you understand: you are focused on opportunities, while the exchanges are focused on your principal.
🎲What is Perptual Futures? The "eternal version" of futures.
Perptual Futures, in essence, is a betting agreement without an expiration date. It's like you and the market are "betting" on whether the future price will rise or fall. It is like a "futures" brother, but more exciting, with no "expiration date," allowing you to keep betting indefinitely.
👉 For example:
You predict the price of watermelon: you can "buy up" or "buy down."
If you buy long, you think the price of watermelons will rise from 1 yuan to 2 yuan. You first "agree" to buy at 1 yuan, and when it rises to 2 yuan, you sell it, earning a profit of 1 yuan.
If you want to short sell, you think the watermelon will drop from 1 yuan to 0.5 yuan. First, you borrow a watermelon and immediately sell it for 1 yuan, then when it drops to 0.5 yuan, you buy it back to return it. By doing this sell and buy, you make a profit of 0.5 yuan.
No matter if the market goes up or down, you have the opportunity to make money as long as you guess the right direction.
Spot trading is something everyone knows about. For example, if a watermelon costs 10 yuan, you have to pay 10 yuan to buy one.
You can use "leverage" for contracts. If you use 10 times leverage, you only need to put in 1 dollar (this is called margin), and you can leverage a watermelon worth 10 dollars!
😈 When you earn: Watermelon rises to 11 yuan (up 10%), you used 1 yuan of principal, earned 1 yuan, return rate 100%!
💀 When losing: The watermelon drops to 9 yuan (a 10% drop), and your 1 yuan principal is completely wiped out (liquidated).
Leverage can make you earn quickly, but it can also make you lose even faster. It amplifies your gains, but it also magnifies your risks.
There is often a phenomenon called a "wicking" where the price suddenly drops and then comes back up, or suddenly spikes and then comes back down. Your principal will only be like this; as long as the price touches your liquidation price, even if it's just for a moment, you will be instantly liquidated.
🧠 3 Life-Saving Concepts You Must Understand
Contracts are divided into two modes: one is called cross margin and the other is called isolated margin.
🛡️Full position means imagining your margin (principal) as all the money in your wallet, so you have more margin and it is not easy to get liquidated. Because you have a solid principal (all the money in the wallet is supporting it), you can withstand larger price fluctuations. For example, if one order is at a loss, the profits from other orders or the unused money in your wallet can be used to cover it, allowing you to hold on longer. But! If it blows, it all blows! If the market trend goes completely against you, resulting in a final liquidation, then all the money in your entire contract account (the whole wallet) will be lost at once.
🎯 Isolated margin means you take a fixed amount of money (for example, 100 yuan) from your total wallet as the principal for a betting round. Whether you win or lose in this round, it only counts against that 100 yuan. Even if you perform poorly in this round and face liquidation, you will only lose that 100 yuan you took out. The other money in your wallet remains safe. The downside is that the principal is small and can easily lead to liquidation. Since you only took out 100 yuan to play, if the price fluctuates slightly in the opposite direction, that 100 yuan may not withstand it and can be forcibly liquidated (margin call) very easily. It is suitable for beginners to test the waters or for placing multiple bets in different directions simultaneously.
Another concept is the funding rate. The funding rate is one of the most confusing concepts in Perptual Futures, but its core logic is actually very simple.
Imagine you are in a casino, and there is a betting table for "Guess Up or Down": the people betting "Up" (Bulls) sit on one side, while those betting "Down" (Bears) sit on the other side. Normally, there should be about the same number of people on both sides, making the betting game quite balanced.
But suddenly, there was a piece of good news, and the vast majority of people rushed to bet on "rise". At this time, the casino owner found a problem:
If the price really keeps rising, those who bet on "up" will make a fortune, while those betting on "down" will lose everything and leave. Over time, no one will play "down" at the betting table, and this game will collapse.
What to do?
The casino owner came up with a solution: he charged a small "balance fee" to the majority side (those betting on "rise") and then distributed it to the minority side (those betting on "fall").
Why do this?
1. Encourage the weak: Give a little subsidy to those who bet on "falling" to keep them from leaving and continue playing.
2. Reminder to the strong: Tell those who bet on "rise": "You are too enthusiastic, you need to calm down; holding this direction comes with a cost."
The "balance fee" refers to the 【funding rate】 in the contract.
How does the funding rate work in the contract?
If there are far more bullish (long) traders than bearish (short) traders in the market, then the bulls have to pay the bears. Conversely, if there are far more bearish (short) traders than bullish (long) traders, then the bears have to pay the bulls. Typically, settlements occur every 8 hours (e.g., at 0:00, 8:00, and 16:00 UTC).
How are the fees determined?
It is automatically calculated by a formula, mainly looking at the difference between the contract price and the spot price, as well as the ratio of long and short positions in the market. You don't have to calculate it yourself; the exchange will display it.
If the funding rate is consistently positive and high, it indicates that the market is very euphoric, and everyone is going long; you should be careful, as a correction may be imminent. If the funding rate is negative, it signifies that the market is very pessimistic, and everyone is going short; this could be a signal for a rebound.
So, next time you see the funding rate, just understand it as "market equilibrium tax" or "overheated sentiment cooling fee"!
🚨How to profit from it? If you still want to give it a try, remember these 6 golden rules: surviving is more important than making money.
First, do not hold positions.
Holding onto a position is the first hurdle that causes everyone to fail in the market. You think the market will come back? Yes, it has come back a few times, but that one time it doesn't come back is enough to reset your life. I've seen too many so-called veterans who have been in the game for 10 years, and in the last wave of the market, they lost everything, even their underwear. It's not that they don't know how to trade; it's that they are unwilling to admit defeat. As a result, they are no longer qualified to talk about trading.
Remember, the market doesn't fear your stop-loss; it fears your stubbornness. A stop-loss isn't cowardice; it's a way to keep yourself alive.
Second, high-frequency operations
Some people feel itchy all over if they don't place an order in a day, even if the market hasn't moved; their hands move first. You think you're trading, but in fact, you're digging your own grave. A true professional trader might only make a few moves in a day for short-term trading, and only two or three moves in a week for long-term trading, but each move is calculated to the bone. The higher the frequency, the denser the mistakes, and in the end, it all comes down to emotional trading. To put it bluntly, it’s not about losing money; it’s about self-consumption. The market loves people like you who have itchy hands.
Third, addiction to watching the market.
Watching the market every day isn't diligence; it's anxiety. You think you're in control of the market, but in reality, you are being led by the trends. Those who truly understand the rhythm set their stop-loss and then turn off the screen. The market doesn't reveal itself to you, and profits aren't just a product of your thoughts. The longer you watch, the more chaotic your emotions become, and the shakier your hands get. In the end, your trades rely on impulse, not logic.
Fourth, always manage risks with a backup position.
Suggested main position: Allocate the reserve position in a 7:3 or 8:2 ratio, and only add to the position when there is a trend reversal or rebound signal, with each addition not exceeding 1/3 of the reserve position. After making a profit, first refill the reserve position, and never use it to increase leverage. With this safety net, you can avoid a complete liquidation and maintain a stable mindset, allowing you to survive longer in the market.
Fifth, reject high leverage.
High leverage is the number one culprit of contract liquidation! Don't touch leverage above 10 times. A 5x leverage can liquidate with a 20% drop, while 10x only needs a 10% drop; staying alive is the only chance.
Sixth, technical analysis is the only reliance.
Fundamentals: Pay attention to the interest rate cut cycle and policy trends (such as the market after Trump's election).
Technical models: candlestick patterns (head and shoulders bottom, box structure), indicators (MACD, moving average system).
Position Management: Each order's stop loss should not exceed 5% of the principal, and the profit and loss ratio should be at least 1:1.5.
Recently, on October 11th, the Black Swan event resulted in an epic liquidation of 20 billion USD, affecting 1.6 million people.
The price of BTC dropped from 122,000 USD to a low of 102,000 USD, with a maximum decline of over 16%; the price of ETH fell from 4,340 USD to a low of 3,400 USD, with a maximum decline of over 22%; major cryptocurrencies like Solana (SOL) and XRP saw declines approaching 30%. It is now normal for altcoins to drop over 90%. Among those who used leverage and engaged in contract trading, 98% have been liquidated. Many people who were flaunting their profit screenshots the day before have vanished the next day, even stopping updates on their social media.
The cryptocurrency space is not lacking in opportunities; what it lacks are people who can endure.
Before you press the "Open Position" button, ask yourself:
Are you in control of the contract, or is the contract in control of your greed?
Exchanges do not need to defeat you, they just need to wait for you to self-destruct.