Many beginners in perpetual contracts often fall into a strange cycle—getting the direction right, but still losing money. This is not a technical issue, but an invisible rule that eats away at your profits.

Some time ago, a trader came to me complaining. He correctly predicted the market direction and held his position for four days, but was forcibly deducted 1,000 yuan in funding fees. When the market rose as expected afterward, his account was already liquidated, and he could only watch his profits fly away. This is a typical case of not understanding the underlying mechanism of contracts, not a matter of judgment ability.

**Funding Fees: The Invisible Money-Consuming Beast**

Many people only look at candlestick charts for price movements and completely ignore the hidden consumption of funding fees. These are settled every 8 hours, with transfers between longs and shorts. When the rate is positive, you pay; when negative, you receive. Even if you are fully leveraged in the correct direction, being charged hundreds of yuan in funding fees over two days can easily push you to liquidation. No matter how the market moves afterward, it’s no longer relevant to you.

How to avoid this? Before choosing a high fee rate, check the data first. Keep individual positions within one settlement cycle if possible, or consider taking the opposite side of the funding fee—short when the rate is high, since you can earn money anyway.

**Liquidation Price: Your Calculation vs. the System’s**

Many think that with 10x leverage, a 10% drop causes liquidation, but in reality, liquidation can happen at a 5% drop. The reason is simple: the platform charges an additional fee during liquidation, which you only consider as a theoretical value.

The solution is straightforward—never open a full position, use isolated margin mode to reduce risk, and keep leverage between 3 to 5 times. Leave enough margin buffer for yourself. Even in volatile markets, you won’t be caught off guard by sudden liquidation.

**The True Cost of High Leverage**

100x leverage may sound exciting, but the costs are outrageously high. Fees and funding costs are calculated based on the borrowed principal. Even if you make a few hundred yuan profit, these costs can wipe out your gains at settlement.

Using leverage properly is crucial: use high leverage for quick short-term trades, and low leverage for long-term holding. The higher the leverage, the harder it is to control risk. Don’t follow the crowd just because someone made money with 100x leverage—that’s survivor bias.

**The Premise of Stable Profits**

Perpetual contracts are never about guessing the market direction to make money; it’s about mastering the rules. Exchanges are not afraid of your losses; they fear you fully understand their tricks. To achieve long-term stable profits, you must first thoroughly understand these invisible rules, then adjust flexibly based on actual market conditions. That’s the real practical approach.