What Is the Purpose of funding_rate_threshold?
The funding_rate_threshold setting in MagicTradeBot defines the minimum positive funding rate a symbol must have to be eligible for Funding Farming.
This ensures the bot targets only profitable opportunities while filtering out low-yield or unprofitable trades.
๐น How It Works
Filters Symbols by Funding Rate
Example:
funding_rate_threshold: 0.03- Only symbols with a funding rate โฅ 3% are considered for trades
- Symbols below this threshold are ignored
Controls Trade Quality
Higher thresholds โ more selective, focusing on high-yield symbols
Lower thresholds โ broader selection, but some trades may have smaller or negligible funding profits
Balances Risk and Reward
High threshold โ fewer trades, potentially higher yield per trade
- Low threshold โ more trades, but possibly lower per-trade profitability
๐น Practical Considerations
| Funding Rate Threshold | Effect on Trading |
|---|---|
| 0.01 (1%) | More trades, lower individual yield |
| 0.03 (3%) | Moderate trades, higher yield |
| 0.05 (5%) | Very selective, fewer trades, highest yield |
- Combine with
max_symbols_to_pickto control how many of the top funding rate symbols the bot actually trades
๐น Example Scenario
- Eligible symbols and funding rates:
| Symbol | Funding Rate |
|---|---|
| BTCUSDT | 0.035 |
| ETHUSDT | 0.028 |
| SOLUSDT | 0.031 |
| ADAUSDT | 0.025 |
funding_rate_threshold = 0.03- Eligible symbols: BTCUSDT (0.035) and SOLUSDT (0.031)
- ETHUSDT and ADAUSDT are ignored due to insufficient funding rate
Result: Bot focuses on the most profitable symbols, reducing low-yield trades.
โ Key Takeaways
- Purpose: Ensure trades only occur on symbols with sufficiently positive funding rates
- Higher threshold: Fewer, more profitable trades with selective filtering
- Lower threshold: More trades with potentially lower funding profit per trade
- Optimizing this setting is critical for maximizing Funding Farming returns