Five Deadly Traps in Contract Trading: Expensive Lessons I Used to Pay With Real Money

Not Understanding the Rules of the Game, No Matter How Much You Make, You Will Still Pay Back to the Market Someone once shared with me: holding a position for four days, the trend was completely correct, but in the end, the account was wiped out because the funding fee was deducted over 1,000 USDT. Just after being liquidated, the market… shot straight up. That feeling is very painful. And it’s not just a story for anyone. This is the familiar tragedy of countless futures traders: staring intently at the price, at the K-line, but ignoring the true rules of the derivatives market. Based on my own “paying tuition” experiences, here are the 5 most dangerous traps in futures trading that anyone participating should read carefully. Trap 1: Funding Fee – The Silent Thief Draining Your Wallet In the early days of futures trading, I was very confident when opening a long position on Bitcoin. The trend was correct, analysis accurate, but after a few days, I realized the account balance… kept decreasing even though the price hadn’t reversed. The cause lies in the funding fee. Funding fee is the balancing mechanism of perpetual contracts. When the contract price is higher than the spot market price (, favoring longs ), longs will have to pay shorts, usually every 8 hours. The opposite is also true. The issue is: This fee is not immediately obvious, but when the market is overly euphoric, funding can spike very high. I calculated: if funding is 0.1% per period, deducted 3 times a day, then after just 1 week, over 2% of capital can vanish, even if the price moves in the right direction. How I avoid this trap: Always check funding before entering a positionIf funding is continuously high (≥0.1%), limit opening positions on the same side as the crowdFor long-term positions, always include funding fees in trading costs Trap 2: Liquidation Price – The Safety Margin You Think Might Be Illusory Many people think: “Using 10x leverage means the price must go against you by 10% to get liquidated.” The truth is not that simple. The actual liquidation price is often much closer than your calculations. The reasons: Exchanges add a “safety buffer” zoneLiquidation fees and slippage directly eat into marginWhen liquidity is poor, exchanges may close positions before reaching the theoretical level That’s why “wicking” candles can wipe out entire accounts in just a few minutes. My experience: Never go all-inPrioritize isolated margin to limit riskReal leverage should be kept at 3–5xAlways leave at least 10% safety margin above the expected liquidation price Trap 3: High Leverage – The Shortcut to the Cliff High leverage creates a feeling of “getting rich quickly.” 50x, 100x, just a 1% price move can double your account. But just as easily, a 1% move against you… ends it. The biggest mistake of high leverage is not in mispredicting the trend, but in: You may predict the trend correctly, but still be eliminated due to short-term volatility. For example: 100x → tolerate ~1% volatility5x → tolerate ~20% volatility Crypto markets are always noisy. The higher the leverage, the less room you have for noise. My principles: Short-term trading: maximum 10xMid-term trading: 3–5xLong-term trend following: 1–3x 👉 Leverage is not for maximizing profits, but for controlling risk. Trap 4: Blindly Following Tips – The Truth Behind “God Tips” Many newcomers are easily convinced by “experts,” “VIP tips,” “inner circles.” Seeing someone boast about beautiful PnL, they immediately follow the trade. I have studied in depth the operational models of many such groups and found: Tip callers usually already have a position beforehandWhen the crowd follows, the price is pushed upThey quietly exit the position, leaving followers to bear the risk In traditional markets, this behavior is prohibited. But in crypto, it’s very hard to control. A safer approach: Learn analytical thinking, don’t copy signalsUnderstand basic technical analysis and capital managementIf you must follow tips, use a very small position to test Trap 5: Trading Without a Plan – When Emotions Take Over This is the most common trap. Typical signs: Losing money and holding on, hoping “the price will come back”Making small profits and closing early to avoid losingNo stop-loss points, no clear targets Since I started trading seriously, I set a strict rule: No plan → No trade Every trade must be written down beforehand. My usual trading plan framework: Reason for entering: what signal?Risk: where is the stop-loss? maximum loss as a % of capital?Capital management: how much of the account does this position occupy?Exit strategy: take profit and stop-loss conditions Conclusion: Longevity Matters More Than Quick Gains Futures trading is not a race to see who makes money fastest, but who survives the longest. Many times we: Correctly identify the trend But still lose money The problem is not in market analysis, but in not understanding the rules. The most valuable thing I’ve accumulated over many years is not a big winning trade, but: DisciplineRisk managementAnd respect for the market Remember: exchanges are not afraid of you making money. What they fear is you understanding their operational mechanisms. 👉 Continuous learning is your greatest asset in the crypto market.