After ten years of struggles in the cryptocurrency world, I have experienced the despair of being heavily in debt and the joy of wealth surging. Six years ago, I resolutely quit my job and devoted myself entirely to trading cryptocurrencies, initially just a frequent victim of liquidation. What truly changed my fate was a conversation with an old mentor five years ago, which opened my eyes and made me reassess my position in the market, helping me understand the eight stages that cryptocurrency investors must go through. Since then, I have used these insights as a mirror to continuously correct my trading strategies and finally regained everything I had lost.
In the eyes of many, retail investors seem to always be the lambs waiting to be slaughtered in the market. But I want to say that as long as you master the correct methods, achieving a comeback in the cryptocurrency world is not out of reach. If you are preparing to enter the cryptocurrency space, I hope my accumulated experiences and thoughts over the years can serve as a guiding light on your journey.
In traditional speculative markets, people often say that to succeed, one must "buy early, buy low, and buy a lot." In the cryptocurrency world, rolling positions can be regarded as the ultimate way to achieve a rapid comeback.
1. The Essence of Rolling Positions and Applicable Scenarios
Rolling positions may sound risky, but it is actually a common technique in futures trading that involves adding to profitable positions. During operations, there is no need to pursue high leverage of 5 - 10 times; maintaining a leverage of 2 - 3 times ensures that the total position is within a controllable range, allowing for relatively safe trading even in Bitcoin. However, rolling positions are not suitable for all market conditions and only have a higher probability of success in the following three situations; all other opportunities should be decisively abandoned:
Direction selection after a long consolidation: When the market has undergone a long consolidation and volatility has dropped to a new low, just before choosing a breakout direction, is a potential opportunity for rolling positions.
Buying the dip during a bull market: In a bull market, buying on deep corrections after a major rise can yield substantial profits.
Breaking through key resistance/support levels: When prices break through significant resistance or support levels on a weekly chart, it often indicates the continuation of a trend, making it a good time for rolling positions to catch big market movements.
Essentially, rolling positions involve using leverage to achieve significant profits during trending markets, and due to passive decreases in overall leverage, adding to trend positions at the right moment to achieve compound effects. The 'right moment' here primarily consists of two types:
- During convergence breakthroughs: Add positions when the convergence pattern in the trend completes a breakout, and when the price enters the main upward wave, quickly reduce the added positions to lock in profits.
- During correction phases: In the process of a trend correction, if the price retraces to near the moving average, gradually buy to increase trend positions.
2. In-Depth Analysis of Rolling Position Risks
Many people are terrified of rolling positions, believing they are highly risky, but in reality, the risks of rolling positions are controllable and even more stable than the logic of many people who open positions randomly.
Assuming you have 50,000 yuan of profit funds ready to enter the market, taking Bitcoin trading as an example, when the price is 10,000 yuan, you open a position using a 10x leverage incremental mode, only using 10% of the position (i.e., 5,000 yuan) as margin, which is equivalent to 1x leverage, setting a 2-point stop loss. Even if a stop loss occurs, the loss would only be 2%, which is 1,000 yuan. Those investors who frequently face liquidation often lack reasonable position management and risk control.
If the market judgment is correct and Bitcoin rises to $11,000, continue to add positions with 10% of total funds and similarly set a 2% stop loss. Even if this stop loss occurs, the overall profit would still be 8%. Following this logic, when Bitcoin rises to $15,000 and the position addition goes smoothly, with a 50% market fluctuation, you can expect to earn around 200,000 yuan. Seizing two such opportunities can easily push your assets over a million.
It is important to emphasize that wealth accumulation does not rely on unrealistic daily or monthly compound growth but is achieved by grasping a few key major market trends. The concept of rolling positions itself does not carry risk; what truly influences the level of risk is the choice of leverage. A 10x leverage can be used for rolling positions, while 1x leverage is also feasible. I personally prefer using 2 - 3 times leverage, as this way, capturing two major market trends can yield dozens of times the return. If you prefer lower risk, you can choose 0.X times leverage. Meanwhile, I always adhere to the principle that "investment in cryptocurrencies should not exceed one-fifth of personal funds, and futures investment should not exceed one-tenth of spot funds." In this way, futures funds account for only 2% of total funds, combined with low-leverage and single-target trading in Bitcoin, the risk is compressed to a very low level.
3. Adhere to Trading Principles: Don't earn small profits, don't lose big money.
"Don't earn small profits, don't lose big money." These eight words are a crucial principle in trading, yet they are extremely difficult to practice. Consider this example: when you open a position with 20,000 yuan and the price quickly rises to 21,000 yuan, you choose to take profit, easily earning a 5% return. However, if the market then skyrockets to 25,000 yuan, you may have made a small profit but missed out on a 50% big opportunity.
After learning the lesson, the next time you encounter the same situation when opening a position, you are determined to hold on and make big profits. However, the price falls back to 20,000 yuan, even dropping below 19,500 yuan, and you can only stop loss and exit. Many investors spend their entire lives struggling in such dilemmas, unable to escape.
In fact, it is unrealistic to want to capture both small and large market movements; we must make choices. My personal choice is "not to earn small profits." Of course, fully adhering to this principle is nearly impossible, but understanding the correct trading philosophy is crucial. What we can do is to continuously cultivate and improve the execution rate of these principles.
4. The Mental Training of Rolling Position Trading
Whether trading short-term or long-term, if you can achieve 200% returns in a major market trend while successfully retaining most of the profits, seizing the next opportunity to earn another 200%, your assets can achieve a fourfold increase. However, if you make a significant profit this time and lose it all next time, everything will be meaningless. In the trading market, there is no concept of 'missing out'; there are only two outcomes: 'loss' and 'gain'.
When you discover the correct trading method, you may be eagerly anticipating the moment of sudden wealth. But remember, finding the method only increases the probability of making money; to achieve sustained profits, you need to continuously cultivate your mindset, patience, and courage:
- Patiently waiting for opportunities: Are you willing to spend a lot of time patiently waiting for the best entry point?
- Overcoming the impulse to take profits: When your position shows significant profits, can you overcome anxiety and dare to give up some profits to hold firmly?
- Staying bold and decisive: Can you do it without overly worrying about the gains and losses of your capital and confidently open positions with a calm mindset?
Anxieties about missing out, eagerness after profits, worries during losses... These emotions require us to spend a lot of time overcoming and cultivating. Therefore, selecting rolling position trading must be done cautiously, and it is advisable to start with profit funds. However, compared to those blindly trading, being able to find the right direction is already a significant improvement, as many still grope in the dark for years without finding the path forward.