Why do beginner traders always get liquidated? Your direction might be correct, but the problem lies in not fully understanding the hidden rules of the exchange.

What is the most frustrating situation? A friend experienced this firsthand: he predicted the market correctly, held on for four days, but just before the expected rally, the funding fee was forcibly deducted by $1000, gradually eroding his margin, and eventually leading to liquidation. When he looked back, the market moved as expected, but he missed out on the gains, and the missed profits felt even more painful. This is a typical case of "market feeling is correct, but the rules are not fully understood."

Let's break it down one by one and examine where those hidden pitfalls of the exchange really are.

**Pitfall 1: Hidden Deduction of Funding Fees.**

Most beginners pay close attention to candlestick charts but ignore the funding fees. These are settled every 8 hours. Positive rates require you to pay, negative rates mean you earn money—sounds simple, but in practice, it can be very damaging. Holding a full position long and being deducted hundreds of dollars over two days can wipe out your margin and force liquidation. How to avoid this? First, enter positions during periods with low funding rates; second, don't hold positions for more than 8 hours; third, prioritize being on the side of the funding rate that works against the majority, so the fee actually benefits you.

**Pitfall 2: The liquidation price is not the number on the textbook.**

Many think that with 10x leverage, a 10% price drop will trigger liquidation, but in reality, liquidation occurs with only about a 5% drop. Why? Because the exchange adds hidden costs like liquidation fees and slippage, which you can't see but are real. How to deal with this? Don't go all-in; use isolated margin mode to contain risk; keep leverage between 3x and 5x; leave yourself room to maneuver.

**Pitfall 3: High leverage is a double-edged sword.**

100x leverage sounds exciting, but the costs are also high—fees and funding rates are deducted based on the borrowed amount, not on profits. When earning only a few hundred dollars, the costs can eat up most of the gains, sometimes even wiping out your entire position. Remember this logic: use high leverage for short-term trades with quick take profits, and lower leverage for long-term stability. The higher the leverage, the easier it is to lose control and face big risks.

The core of contract trading profitability isn't about guessing the market correctly; it's about understanding these game rules. Exchanges are never afraid of you losing money—they're afraid that you understand their tricks. To make consistent profits over the long term, you must first master these detailed rules before deciding how to trade. Don't rush into full positions; learn the rules thoroughly first.