Recently, a fren came to me to complain, saying that he saw the right direction but held on for four days, and in the end, the funding rate gnawed away over 1000 bucks, leading to him getting liquidated. As soon as he turned around, the market took off.

I told him the truth: "Bro, you didn't lose to the market, you lost to the rules."

To put it simply, many people who engage in contract trading only know how to guess the direction. In my opinion, what really determines whether you make a profit or a loss is not your sense of direction, but rather those hidden rules that are deeply concealed and not easily visible.

**funding rate——the invisible blood vessel**

This thing settles every 8 hours. If you stand on the losing side for a long time, the funding rate will slowly drain your principal like a frog being boiled in warm water. By the time you realize it, there won't be much left.

How to cope? Simple and straightforward - don’t enter the market when the rates are the highest. If you have a long-term mindset, don't hold for more than one cycle, otherwise, just stand on the side of collecting money.

**Liquidation Price - The Nominal Defense Line**

Many people think that the liquidation price marked by the platform is the real bottom line. Wrong. The platform has long taken into account slippage, fees, and other factors, so the actual price at which you get liquidated could be much closer to the safety line you think. Sometimes, a sudden fluctuation can wipe out your position.

Solution: Switch to isolated margin mode, actively reduce leverage, set stop-loss levels yourself, and maintain a distance from the platform's liquidation price. Only then can it be considered truly safe.

**High Leverage - The Train to Zeroing Out**

The handling fee is calculated based on your nominal principal; the higher the leverage, the larger the nominal principal. It may seem like you earn quickly when you're making profits, but once you incur losses, the little gains you made will be swallowed up in an instant. High leverage is like a double-edged sword; it has great power but can also inflict deep harm on yourself.

My suggestion: Use high leverage for trial trades, and control the cost of trial and error. For real trending markets, use low leverage, so even if you can't get the maximum profit, at least you'll survive long enough. The principle of taking profits when they are good never goes out of style.

**Remember this**

The crypto space is not lacking in people who can read charts. What it truly lacks are those who can understand the rules, manage risks, and enforce discipline. The market is not afraid of you making money; rather, it fears that you have truly thought things through.

The ones who laugh last are not necessarily the smartest. Often, it's those who are the most stable and understand where their boundaries lie.