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?
On centralized manipulated exchanges I would stay miles away from using Funding fees to actually make any profit. It's because exchanges could easily change the direction of the fees based on their arbitrary decisions to get more profits. Also if you want to make profits in this way you have to study the market on a macro level. You have to continuously keep looking at the order book, the sentiment of the market, the types of trade which have been recently hit in the past trades. From what all this sounds like this definitely isn't worth the pain that it would give you.