Why Binance shows you “Funding Rate”

(and why beginners should care)

When I first started using Binance Futures, I ignored one thing completely: Funding Rate.

I thought it was just some technical number for advanced traders.

It wasn’t.

Funding rate is basically a small fee paid between traders, not to Binance.

It tells you which side of the market is overcrowded.

Here’s the simple idea:

If funding rate is positive

→ most people are long (buying)

If funding rate is negative

→ most people are short (selling)

Why does this matter?

Because markets often move against the crowd.

Example: If everyone is already long and funding is very high, there are fewer new buyers left.

That’s when price often slows down or pulls back.

If funding is low or negative and price is stable, it means:

market is not over-excited

risk of sudden reversal is lower

How beginners can use this

(no trading skills needed):

Open a Futures pair $BTC , $ETH etc.

Check funding rate

Avoid entering trades when funding is extremely high

Prefer calm, neutral funding conditions

This won’t make you rich overnight.

But it helps you avoid bad timing, which is what hurts most beginners.

I wish I understood this earlier.