📊 What is the Funding Rate and why are you sometimes in profit and sometimes in loss?
If you trade futures, you have probably noticed the Funding Rate line. Many ignore it — and that's a mistake.
🔹 The Funding Rate is a periodic payment between long and short traders.
It is necessary to keep the futures price from "running away" too far from the spot price.
How it works in simple terms 👇
▪️ When the majority opens longs, the market "overheats" —
👉 longs pay shorts.
▪️ When shorts dominate, the situation changes —
👉 shorts pay longs.
💡 Why do you earn today, but lose tomorrow, even if the price doesn't change much?
Because:
The Funding Rate can be positive or negative
The payment is deducted every few hours
With high leverage, even a small percentage becomes significant
Sometimes a trader: ✔️ guesses the price direction
❌ but loses on the funding fee
And vice versa — the price stays the same, but funding brings profit.
📌 Conclusion
The Funding Rate is neither an enemy nor a friend. It is a market balance mechanism.
Understanding its logic helps to better realize why the outcome of a trade does not always equal the price movement.
🧠 In trading, it is important to consider not only the chart but also the "hidden" elements of the market.