Ask HN: How to Negotiate Contract Rates?

Looking from feedback from fellow HN readers who provide contract services.

Once the job fit has been determined, how do you approach the funding part? Do you lead with, "I am happy to do this job for XXX" or do you simply say, "I charge XXX per hour". Do you have a window of acceptable rates or do you have a firm/flat rate? Finally, how do you determine your rate is reasonable for the market?

In general, I am looking for ideas/tips on negotiating the right rate especially when the contract is a great fit. On one hand, I don't want to undersell/underbid my skills, and on the other hand I definitely want to take the opportunity because it could lead to a very long term client.

Thanks.