7 Common Mistakes in Crypto Perpetual Futures Trading

Crypto perpetual futures have become one of the most popular trading instruments in the digital asset space. With the ability to go long or short, trade with leverage, and access a wide range of cryptocurrencies 24/7, perpetual contracts offer unmatched flexibility. However, this power also comes with risk—and for many new traders, that risk is magnified by common, avoidable mistakes.

Whether you’re just getting started or looking to sharpen your edge, this article outlines the top 7 mistakes to avoid when trading crypto perpetual futures, helping you reduce unnecessary losses and become a more disciplined, confident trader.

1. Overleveraging Positions

Why it’s a mistake: Leverage allows you to control a larger position with a smaller capital outlay. While this can amplify gains, it also magnifies losses. Many new traders are tempted by high leverage (20x, 50x, or more) without fully understanding the risks associated with liquidation.

Pro tip: Stick with lower leverage—2x to 5x—until you’ve built a consistent strategy. Always calculate your liquidation price before entering a trade and understand how volatility can quickly wipe out high-leverage positions.

2. Trading Without a Clear Strategy

Why it’s a mistake: Jumping into trades based on emotions, rumors, or social media hype rarely leads to sustainable success. Without a clear plan, you’re essentially gambling.

Pro tip: Define your entry and exit points, risk tolerance, and position size before placing any trade. Backtest your strategy and stick to it consistently.

3. Ignoring Risk Management

Why it’s a mistake: Even profitable traders lose trades. What separates them from losing traders is how well they manage risk.

Pro tip: Always use stop-loss orders and never risk more than 1-2% of your total capital on a single trade. Perpetual futures move fast, and risk control is critical to long-term survival.

4. Holding Losing Trades Too Long

Why it’s a mistake: Many traders fall into the trap of hoping a losing position will turn around. This often leads to larger losses or full liquidation.

Pro tip: Cut your losses quickly and reassess. It’s better to take a small, controlled loss than to let it balloon into a catastrophic one. Losses are part of the game—managing them well is a trader's edge.

5. Neglecting Funding Rates

Why it’s a mistake: In perpetual futures, funding rates are payments exchanged between long and short traders every few hours. Ignoring them can eat into your profits or add unexpected costs.

Pro tip: Monitor funding rates closely, especially for highly volatile or trending assets. If you're holding a long or short position for an extended period, consider how funding fees will impact your PnL.

6. Trading During High Volatility Events Without a Plan

Why it’s a mistake: Major events—like CPI releases, Fed announcements, or exchange outages—can cause violent market swings. Without a plan, traders often make impulsive decisions that lead to avoidable losses.

Pro tip: Avoid opening new trades right before big events unless you have a well-defined strategy. Use wider stops or reduce position size to account for volatility spikes.

7. Using All Available Margin

Why it’s a mistake: Just because your exchange offers a certain amount of margin doesn't mean you should use all of it. This leaves no room for error and increases the chance of forced liquidation.

Pro tip: Use only a portion of your available margin. Maintain a buffer to absorb volatility and avoid getting stopped out prematurely.

Perpetual futures trading can be incredibly rewarding—but it’s not without its pitfalls. By avoiding these seven common mistakes, you can better protect your capital, improve your trade execution, and build confidence over time. Remember, success in trading is less about hitting home runs and more about consistent, disciplined performance.

Quick Checklist for Every Crypto Perpetual Trader

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Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with a significant risk of loss due to its high price volatility, and is not suitable for all investors. Please refer to our Terms.