Having navigated the crypto markets over the past few years, I've seen too many people clearly get the market judgment right, only to end up losing everything in the end. Where's the problem? It’s actually because they don’t understand the hidden rules of exchanges. Today, I’ll break down the three most common pitfalls in perpetual contracts.

**Funding Fees: The Invisible Vampire**

A fan once complained to me that their long position was perfectly correct, but after holding for four days, they got liquidated. When they checked their account, they found that the funding fee had forcibly deducted 1000 USDT. This isn’t an isolated case; it’s the norm.

To put it simply, the funding fee is the "automatic balancing mechanism" of perpetual contracts, settled every 8 hours by the exchange. When the market is extremely bullish, long traders have to pay shorts—usually shown as a rate like 0.01%. It doesn’t sound like much, but you need to do the math: with 10x leverage and a 0.05% rate, over a year, it’s equivalent to losing 18% of your profit. Your principal remains, but your profit is already eaten away.

How to survive? First, always glance at the funding rate table before opening a position—don’t foolishly go long during a market peak. Second, short-term trading is short-term; holding overnight is like giving a gift to your opponent, especially with high leverage. Third, and most clever—when the funding rate stays negative, shorting can actually earn you "rent," provided you can truly judge the trend.

**The Small Trap of Liquidation Price**

Many newbies think calculating liquidation price is straightforward: "10x leverage, a 10% drop, and you’re liquidated"—that’s too naive.

The reality is, the exchange’s liquidation mechanism hides a bunch of hidden costs: fees, funding fees, slippage… When all these are added up, your actual liquidation point might occur 2-3% earlier than what the calculator shows. Many people get liquidated due to this subtle deviation.

**The Essence of Leverage Traps**

At the end of the day, leverage is just lowering your psychological bottom line. 5x, 10x, 100x… the bigger the number, the faster you lose money. The craziest part is some people actually play with 100x leverage—it's no different from gambling.

Want to survive longer in this market? Managing risk is a thousand times more important than chasing huge profits.