Which is safer: having the same position size each time or rolling positions?

Generally speaking, having the same position size each time is relatively safer for rolling positions, for the following reasons:

Degree of risk exposure

• Same position size each time: Invest a fixed percentage of capital for each trade, for example, using 10% of total capital to open a position each time. Even if there is a judgment error, the loss is limited to that portion of the position and will not be exacerbated by subsequent operations, making the overall impact on the account capital relatively controllable. For example, with a principal of 100,000, a 10% position each time means 10,000, and if this trade incurs a loss of 10%, the loss will be 1,000 yuan.

• Rolling positions: Increasing positions based on profits. If the market trend aligns with expectations, it can amplify returns; however, if the direction reverses, the increase in position size can exponentially amplify losses. For example, if after rolling a position from an initial 10% to a total position of 20% after making a profit, a market reversal would result in losses being double the original. Moreover, if there are consecutive judgment errors and positions become too heavy after multiple rollings, the risk exposure may be too large, potentially leading to significant losses or even liquidation.

Capital management and flexibility

• Same position size each time: Capital allocation is relatively balanced, which can better maintain the liquidity of the account to cope with different market situations. For example, during market fluctuations, trading multiple times according to the established position can capture opportunities; when encountering sudden risks, there is also capital reserve available to respond.

• Rolling positions: Excessive rolling can lead to a large amount of capital being concentrated in positions, reducing capital flexibility. If the market fluctuates violently, there may not be enough excess funds to add to positions or adjust them, and insufficient margin could result in forced liquidation.

Requirements for investor capability

• Same position size each time: The operation is relatively simple, and the requirements for market judgment and trading skills are not so stringent. Ordinary investors can control risk to a certain extent as long as they set a reasonable position ratio and strictly follow their trading plan.

• Rolling positions: It requires investors to have strong judgment on market trends, accurately grasp the timing, position, and stop-loss settings for increasing positions. Rolling positions are more suitable in a one-sided trending market, but the actual market is often volatile, making it difficult for most investors to accurately judge trends, and they can easily incur losses due to incorrect rolling decisions.