Funding rate for make profit
Funding rate for make profit
Two days ago, I opened a position with a very risky volatile coin at some minutes to its funding rate fee, the coin was having -1.98% funding rate fee. You can see how risky that is which I can not call trading but gambling.
After I opened a long position, luckily I was able to have unrealized PnL of $67, but it was just some seconds remaining to another 8 hours funding rate time to start counting down. I waited and all that I noticed in less than a second after the next eight hours began was that the $67 profit that was seen suddenly droped to $4.
I was paid the funding fee which made me to make almost $60 in total. I mean the profit from trading is around $3 if trading fee has been deducted while the remain profit was from funding fee.
I noticed that traders are using the funding fee to manipulate the market, although we can not call it manipulation too because they want to make profit, but they can also lose. That is trading. If you are trading these less volatile coins with high funding fee, you will noticed what that I am talking about.
Are you using funding fee to make money from the derivative market? If so, what is the most possible way have you used it to make money successfully or it is not actually working?
Trying to make money out of the funding fee is more of gambling IMO because
1. It’s dynamic
2. The market can either go against your position or not.
Just the other day some trader was complaining about how rampant the funding fee was for the shitcoin perpetuals on MEXC. This is one of the reasons I don’t even want to trade on MEXC. It is complete chaos over there, with very volatile shitcoin going for as high as 200X with barely any liquidity. Now who provides the liquidity? I still feel as though at times, traders could be trading against the exchange unknowingly and the exchange will always make sure they win.