I have a childhood friend who is two years older than me, but when it comes to contract trading, he's like a novice at a casino. That year, we both went all-in with leverage, tripling our money in two days, only to lose it all in one day. On the night of liquidation, the two of us stared blankly at the K-line chart, and he finally squeezed out a sentence: "This thing is not about betting on size, it's about betting on life."

After that lesson, I realized one thing: leverage is not a printing press, it's a magnifying glass. If you open 10x leverage, price fluctuations are amplified tenfold; if you go to 100x, it brutally magnifies your human flaws by 100 times right in front of your eyes. Today, I want to talk about some real talk, especially for those who have been beaten by the market.

**Funding Rate: A Barometer of Market Sentiment**

Many people only watch the price movements, but I always check the funding rate before opening a position.

When the positive rate appears, it means longs are paying, which usually indicates high bullish sentiment across the network. But this is also a sign that the market is not far from its peak. At this point, chasing longs is like giving a gift to big players. Conversely, a negative rate indicates shorts are paying, and market enthusiasm is very low. But low levels often harbor rebound opportunities. During the BTC dip near 120,000 yuan last year, the negative funding rate persisted for three days. I positioned myself then and caught a subsequent 20% rebound.

The core logic is simple: the funding rate is a contrarian indicator. When the market is collectively crazy about chasing gains, you need to think in the opposite direction of the funding rate.

**Leverage Multiplier: 3 to 5x is trading, above 10x is gambling**

I've seen many stories: a 69-year-old grandfather used leverage and ended up liquidated, owing the exchange over ten million yuan. I've also seen a 90s rookie open 20x leverage and get wiped out in one night. Leverage is not your weapon; it's an amplifier — it can magnify your gains but also your luck and psychological risks infinitely.

New traders are easily trapped: high leverage makes you relax control over your positions, and even if your judgment on the direction is correct, you can still get caught in the oscillations and be liquidated.

My own rules are very strict: no single coin position exceeds one-third of total funds, and the leverage must match your capacity to withstand liquidation risk. For example, 5x leverage means a 20% drop in price will liquidate you; you must be able to accept this risk.

The techniques are not that complicated; the hard part is disciplined execution.