The Funding Rate Extreme strategy exploits the mechanics of perpetual futures contracts. On perp exchanges, funding rates are periodic payments between longs and shorts that keep the perpetual price anchored to spot. When funding is highly positive, longs pay shorts — indicating the market is overleveraged long. When highly negative, shorts pay longs. The strategy takes contrarian positions: when funding becomes extremely positive (>0.1% per 8 hours), it shorts, betting that overleveraged longs will unwind their positions. When extremely negative, it goes long. This thesis is mechanically sound — extreme funding rates are unsustainable because they impose a direct cost on the dominant side. As that cost accumulates, positions get unwound, driving price in the contrarian direction. Backtesting across 571 trades produced a 54.3% win rate and $27,170 profit from a $10,000 starting balance. The 16.1% max drawdown is manageable. The most common failure mode was "entered pump top" (185 occurrences), where the strategy entered contrarian positions too early during a funding extreme that persisted longer than expected. Key improvement areas: adding a funding rate trend filter (only enter when funding has started to normalize), graduated position sizing based on funding magnitude, and sector awareness (funding extremes during broad market trends are less reliable).