Got the direction right but still lost money? Don’t blame the market just yet—calculate your costs first.

When reviewing their trades, many people focus on just one question: Did they get the direction right? But in a sideways market, two easily overlooked costs often eat into profits: **funding rates** and **slippage**. Fresh data from Binance today is a perfect example.

**Understand the risks before discussing strategies**

Leverage in futures contracts magnifies losses just as much as gains. Funding rates can flip, so the side that earns funding today may have to pay it tomorrow. When volatility rises, slippage tends to increase too. Low-cap coins have thin order books, so a market order may fill at a price far from the one you see. If you don’t calculate your costs correctly, you can end up with nothing to show for it even when you get the direction right.

**Today's actual funding rates: one stayed steady, the other changed sign**

Here are the Binance perpetual futures funding rate data I pulled today:

- **$BTC: stayed steady at around 0.01% all day**. Longs pay, but the rate is very small; the market isn't overheated.

- **$ETH: narrowed steadily from around -0.0088%, reaching about +0.0035% most recently today**. The payment flipped from shorts to longs.

In the same market, two coins can have costs going in opposite directions. Placing trades on gut feel is like paying with your eyes closed.

**Let's do the math: how expensive is the funding rate?**

Assuming Binance settles every 8 hours, here's an example using a $10,000 notional position:

| Funding rate (every 8 hours) | Per settlement | 3 times a day | Per week |

| --- | --- | --- | --- |

| **0.01%** | **About $1** | **About $3** | **About $21** |

| 0.05% (hypothetical high-rate scenario) | About $5 | About $15 | About $105 |

0.01% may not look like much, but at a high rate, a week can eat up 1% of your position. More importantly, funding isn't a little “tip” on top of trading fees—it’s settled three times a day, and the longer you hold, the more it costs. Short-term traders betting on direction pay less; long-term holders pay more—**time in a position is a cost in itself**.

**Slippage: the difference between market and limit orders**

| Order type | Advantage | Drawback | Best for |

| --- | --- | --- | --- |

| **Market order** | **Fills immediately** | **Fill price is unpredictable; slippage can be high in volatile markets** | **Emergency stop-losses, when you need to exit immediately** |

| **Limit order** | **Price is controlled** | **May not fill, and you could miss the move** | **Routine entries, placing an order at your desired price** |

Here's my checklist—just follow it:

1. **Check three things before placing an order**: the current funding rate, the bid-ask spread, and your fee tier.

2. **Use limit orders for routine trades**; use market orders only when a stop-loss is needed to protect your account.

3. **Split up large orders**. Don't sweep through the order book in one go—that's how slippage happens.

4. **Factor in how many days you'll hold**: if you plan to hold for a week, include a week's funding costs in your take-profit target.

5. **Trade less in a sideways market**: when the price range is under 1%, making three round trips can cost more in fees and slippage than the market's entire move.

**In a nutshell**

Direction is a judgment call; costs are a math problem. You can guess on a judgment call, but not on the math—**spending 30 seconds before placing a trade to calculate the funding rate and slippage is more useful than reading three more market analyses**.

Do you usually calculate the funding rate before placing a trade, or do you just look at the direction and jump in?

#FuturesBasics