Why do contract trades always result in losses? Many people stumble not because they misread the market, but because hidden rules cut them off.

The most common scenario is this: clearly judging the direction, holding the position for four days, only to have over 1,000 USDT in funding fees deducted, and finally being liquidated. Ironically, the market then takes off after closing the position. This is a typical case of being defeated by the rules, not by market analysis.

**Funding Fees are the Silent Killer**

Many traders only focus on candlestick charts and completely overlook the invisible predator—funding fees. Settled every 8 hours, when the rate is positive, longs pay shorts; when negative, the reverse. Seemingly insignificant rates of 0.05% or 0.1% can, during prolonged high-fee periods, eat away hundreds of USDT of principal in just two or three days. Going full leverage long isn’t wrong, but being forced out due to relentless funding fees—everyone has experienced this frustration.

The solution is simple: avoid environments where high funding rates exceed 0.1% for two consecutive rounds, keep position holding periods within 8 hours, and when the market is clear, prioritize taking positions that counter the funding fee trend.

**Liquidation Line is Closer Than You Think**

Many traders think: with 10x leverage, as long as the decline isn’t more than 10%, they won’t get liquidated. But reality hits hard—at just a 5% drop, your position is already liquidated. Why? Because exchanges charge an additional liquidation fee during forced liquidation, directly reducing your safety margin.

The countermeasure is to give up the dream of full leverage, switch to isolated margin mode to contain risk, and keep leverage between 3-5x, reserving enough margin for a buffer.

**Hundredfold Leverage is a Bait, Not a Tool**

100x leverage sounds exciting, but behind it are traps like fees and funding costs calculated on borrowed principal. Even if your direction is correct and you make a few hundred dollars, the settlement fees can swallow all your profits. High leverage is suitable for quick intraday trading; low leverage is necessary to withstand cyclical market trends. Extreme leverage exponentially increases risk.

Ultimately, contract losses are often not due to misreading the market, but because you fail to understand the game rules. The exchange’s design logic is like this: they’re not afraid of you judging the wrong direction; they’re most afraid that you see through the fee system. To survive and profit in this game, stop gambling on directions and start studying the rules.