I've seen too many people rush into the contract market with passion, only to disappear silently shortly after. Every time I see this kind of thing, it really doesn't sit well with me. To be honest, contracts are like a magnifying glass — they not only amplify your profits but also magnify your greed and fear simultaneously.

Today, let's skip the empty talk and get straight to some real stuff. If you want to survive long enough in the perpetual contract circle, there are three hurdles you can't avoid: **Rules, Leverage, and Mindset**. The reason I’ve been able to navigate this market so far is not because of some mysterious secret, but because I strictly control these three checkpoints.

**Rules: If you can't understand this, you'll eventually become a leek**

Newcomers rush in eager to find various trading strategies, but they don't even understand the basics of funding rates. That's a big problem.

Funding rates are not just the small fees the platform charges; they are the settlement mechanism between longs and shorts in the perpetual contract market. When the rate is positive, it means longs pay shorts, which usually indicates market sentiment is bullish and the heat is high; conversely, a negative rate means shorts transfer funds to longs, often signaling a cooling market.

Based on practical experience, when you encounter a positive funding rate, don’t blindly chase longs, because it’s very likely a sign that the market has been overhyped, and risks are accumulating; when you see a negative rate, don’t rush to cut your losses, as it might be a sign that a rebound is coming. Understanding the logic behind funding rates is as essential as understanding road signs when driving.

**Leverage: Want to amplify gains? First, understand the risks clearly**

Leverage is a double-edged sword. Used correctly, it’s a handy tool; used poorly, it becomes a deadly weapon. My advice to beginners is to start testing with 3 to 5 times leverage, and never easily exceed 10 times.

Here's a practical example — suppose you have $10,000 in your account and open a 10x long position.