Recently, a friend came to me, not to show off profits, nor to ask about market levels.

"Honestly, I didn't get the direction wrong; I held my position for four days. But just when the market was about to explode, the funding rate wiped out a full 1,000 bucks of my capital. In the end, I was forced to liquidate, and only then did the market start moving."

I didn't comfort him, but simply told him a reality: you didn't lose to the market, but to rules you don't understand.

Many novice contract traders think this way—the core is to judge the right direction. But in reality, what truly determines the life or death of an account is often not that. I've seen too many traders who correctly judge the direction but end up getting liquidated inexplicably. The problem lies in these three points.

**Point 1: Continuous bleeding from the funding rate**

The sneakiest thing about the funding rate is— it doesn't kill you all at once, but gradually eats away at your principal.

It settles every 8 hours, with longs and shorts continuously paying each other. As long as you're holding a position, this money keeps flowing out. Many people don't realize that your market direction might be correct, but your profit progress can't keep up with the rate of funding costs. Especially during periods when the funding rate is consistently unfavorable, before the market even starts to move, your account’s health can already be severely drained.

A more rational approach is: avoid opening positions during times when the funding rate is obviously imbalanced. If you're holding medium- to long-term, try not to cross too many funding settlement periods. Ideally, stand on the side where the funding rate is favorable—let time pay you, rather than paying time.

**Point 2: Deadly misunderstanding of leverage multiples**

A common misconception is: 10x leverage = 10% drawdown space. But the logic for calculating liquidation price is far more complex.

With the same 10x leverage, if you're using isolated margin mode and have sufficient available balance, your drawdown space is more relaxed. But if you're using cross margin or have insufficient margin, even a slight market fluctuation can trigger liquidation. I've seen too many people who, due to a shallow understanding of this mechanism, hold onto what seems like a "safe" leverage ratio, only to be wiped out by extreme volatility.

**Point 3: Asymmetric risks of position size and timing**

In the futures market, the asymmetry between making and losing money is much greater than in spot trading. You might spend two weeks confirming a direction is correct, only to lose everything because you opened at the wrong time, used unreasonable leverage, or didn't consider funding costs.

True experts are not just betting on market direction blindly. They understand these hidden rules thoroughly and precisely choose entry timing, position size, and holding period.

Many traders lose unfairly because they have never systematically learned these principles. They think futures are just spot multiplied N times, but the real danger lies in those invisible, intangible mechanisms.

Next time you encounter a similar situation, I will tell them directly: surviving in the futures market is more important than making money. First, understand the rules, then talk about profits.