A trader confided in me a couple of days ago, looking a bit weary.

He said: "I actually guessed the direction correctly and held for four days, but the funding rate gradually ate away at my position, resulting in a loss of 1000U. I was just liquidated, and right after that, the market turned and surged."

I told him a truth:

You didn't lose to the market, but to the rules of the game.

Many people think that as long as you get the direction right in contract trading, you're halfway there.

But in reality, how long you can survive often depends on those hidden "traps" lurking in the corners.

Today, let's uncover the three most overlooked risk details in contract trading.

**1. Funding Rate: The Invisible Harvest Machine**

Funding rate is like slowly boiling a frog.

It settles every 8 hours, with longs and shorts compensating each other.

Even if your direction is correct, if the rate is consistently against you, your position will gradually diminish, like being gnawed away by ants.

I've seen too many people who weren't wiped out by the market, but by the funding rate slowly eroding their positions.

How to deal with it:

- Enter during times when the funding rate is relatively normal
- Don't foolishly cross multiple settlement periods and hold through
- If you can be the "charging party," don't be the "paying party"

**2. Liquidation Price: That line isn't as solid as you think**

Suppose you're using 10x leverage; you might naively think you can withstand a 10% adverse move.

Reality check: sometimes, a 5% drop can directly wipe out your position.

Because the liquidation price already accounts for trading fees, slippage, and risk reserves.

That "line" on your screen isn't a real fortress.

How to deal with it:

- Avoid over-leveraging; prioritize using isolated margin mode to control risk
- Keep leverage between 3x and 5x to leave some room for maneuver
- Actively set stop-loss orders; don't rely on the platform to save you

**3. High leverage is a trap, not a shortcut**

100x leverage sounds tempting, but it's actually a fast track to zero.

Fees, funding rates—all are calculated based on the amplified nominal principal.

Even if your direction is correct, various costs can wipe out your profits entirely.

How to deal with it:

- Extremely high leverage is only suitable for very short-term small trades, with strict stop-loss enforcement
- For positions with real potential, stick to low leverage and follow the trend
- Take profits when you can; don't be so greedy, don't dream of getting rich quick

Final words: Contracts are not a casino; the rules are your biggest opponent.