I have been trading cryptocurrencies for over 10 years and have summarized a no-brainer rolling position method: 300 times in 3 months, earning 30 million. If you also want to share a piece of the pie in the crypto market, take a few minutes to carefully read this article and you will benefit for a lifetime!
01 Timing for rolling positions
02 Technical analysis
03 Position management
04 Adjusting positions
05 Risk management
Since the Federal Reserve's interest rate cut policy has settled, the cryptocurrency market has welcomed a new wave of investors who are eager to find a place for themselves in this field. However, the crypto space is not a gold mine; it resembles a cruel natural selection, where only those who truly adapt to market rules can stand firm. Although the market is open to everyone, only a few investors can achieve substantial returns in this field.
For those investors preparing to enter the cryptocurrency market, it is crucial to recognize that the crypto space is not a place where one can easily realize dreams of overnight wealth. Instead, it requires long-term market research, experience accumulation, and continuous learning from investors. Many enter the market with fantasies of quick wealth, hoping to achieve huge returns through small investments. While such success stories do exist, they often require carefully planned 'rolling position' strategies, which are not easily achieved and cannot be accomplished through frequent trading.
The 'rolling position' strategy is theoretically feasible; it requires investors to invest at appropriate positions when major opportunities arise in the market, rather than engaging in frequent small trades. The successful implementation of this strategy often relies on precise judgment of market trends and timing. Although seizing a few such opportunities in a lifetime can lead to wealth accumulation from zero to millions, it requires investors to possess extremely high market insight and decision-making ability.
In the pursuit of profit, investors should not only focus on the final profit target but should pay more attention to how to achieve those targets. This means starting from their actual situation, investing time and effort to deeply understand the market, rather than blindly pursuing unrealistic huge profits. The essence of trading lies in identifying and seizing opportunities, not in pursuing light or heavy positions blindly.
In daily trading practice, investors can operate with small amounts of capital to accumulate experience and skills. When real big opportunities arise, they can go all in to seize them. As investors grow their small capital to millions, they will unconsciously master strategies and logic for making big money. At this point, their mindset will become more mature and steady, and future operations will resemble the replication and optimization of past successful experiences.
For those who wish to learn rolling position strategies or want to understand how to grow from a small capital to millions, the following content will provide valuable guidance and advice. This will be a journey full of challenges and opportunities, requiring investors to invest a lot of time and effort to delve deep into research and practice.
Timing for rolling positions
The art of rolling positions cannot be mastered on a whim. It requires the right timing, location, and people to increase the odds. Here are four golden opportunities for rolling positions:
1. Breakout after a long period of consolidation: When the market remains in a sideways state for a long time and volatility drops to a new low, once the market chooses a breakout direction, consider using rolling positions.
2. Buying the dip during a bull market: During the wave of a bull market, when the market experiences a strong rise followed by a sudden drop, consider using the rolling position strategy to capture the opportunity to buy the dip.
3. Weekly level breakout: When the market breaks through key resistance or support levels on the weekly chart, it’s like breaking through a solid defense line. At this time, rolling positions can seize this breakout opportunity.
4. Market sentiment and news events: When market sentiment is as changeable as the weather, or when significant news events and policy changes could shake the market, rolling positions can become a powerful tool in your hands.
Only under these specific circumstances will the odds of rolling positions significantly increase. At other times, it's best to remain cautious or simply abandon those unclear opportunities. But if market conditions seem suitable for rolling positions, don't forget to strictly control risks and set stop-loss points to guard against unforeseen events. After all, wise investors are always those who understand how to find a balance between risk and opportunity.
Technical analysis
After confirming that the market is suitable for rolling positions, the next step is technical analysis. First, look at the trend, using tools like moving averages, MACD, and RSI to determine whether the market is going up or down. If possible, it’s best to use multiple indicators together for better reliability.
Identify the key support and resistance points in the market, determine whether the breakout is reliable, and use divergence signals to seize reversal opportunities. For example, if the price reaches a new high but MACD does not follow, this could indicate a top divergence, suggesting that the price might drop; in this case, consider reducing your position or shorting. Conversely, if the price hits a new low but MACD does not, this could indicate a bottom divergence, suggesting that the price might rise; in this case, consider increasing your position or going long.
Position management
Effective position management hinges on three steps: determining the initial position, setting rules for increasing positions, and formulating strategies for reducing positions. For example, this makes it easier to understand.
Initial position: If you have 1 million, the initial investment should not exceed 10%, which is 100,000.
Rules for increasing positions: When you decide to increase your investment, make sure to wait until the price breaks through a key resistance level, and the amount you increase each time should not exceed 50% of the original investment, which means a maximum additional investment of 50,000.
Reduction strategy: Once the price reaches your expected profit target, you can start selling gradually. Remember, let go when it's time to let go, and don’t hesitate. The amount you sell each time should not exceed 30% of the current holdings to gradually lock in your profits.
In fact, as ordinary investors, we can be bolder when we encounter great opportunities, and more conservative when opportunities are scarce. With good luck, perhaps we can earn a few million; if luck is bad, we can only accept reality. However, I must remind everyone that once you make a profit, you should withdraw the initial capital first and continue to invest with the profits. You can afford not to make money, but you cannot afford to lose money.
Adjusting positions
Once position management is sorted out, we arrive at the most critical step—how to achieve rolling positions through adjusting holdings.
1. Timing: Enter the market when it meets the conditions for rolling positions.
2. Opening positions: Follow the signals from technical analysis to find the right time to enter.
3. Increasing position: If the market moves in your direction, gradually increase your position.
4. Reducing positions: Once you've achieved your predetermined profit, or if the market seems a bit off, start selling gradually.
5. Closing positions: When you reach your target price or when it’s clear the market is about to change, sell everything.
Here’s how to operate it, I will share my insights on rolling positions:
1. Add to the position after making money: If your investment has increased, consider adding more, but only if the cost has come down and the risk is smaller. Don't add every time you make a profit; instead, do it at the right time, like at breakout points, and quickly reduce once it breaks out or add during a pullback.
2. Base position + trading: Divide your assets into two parts, keeping one part unchanged as a base position, while buying and selling with the other part during market price fluctuations to reduce costs and improve returns. Here are a few ways to split it:
1. Half-position rolling: Keep half of your funds long-term while buying and selling with the other half during price fluctuations.
2. Thirty percent base position: Keep thirty percent of your funds long-term and trade the remaining seventy percent during price fluctuations.
3. Seventy percent base position: Keep seventy percent of your funds long-term and trade the remaining thirty percent during price fluctuations.
The purpose of this is to maintain a certain position while using short-term market fluctuations to adjust costs and optimize holdings.
Risk management
Risk management can be simply defined as two things: overall position control and capital allocation. Ensure that your total investment does not exceed the risk you can bear, and be wise about capital allocation—don't put all your eggs in one basket. At the same time, always pay attention to market dynamics and changes in technical indicators, and adjust your strategy flexibly according to market conditions. Be ready to stop loss or adjust investment amounts as needed.
Many people may feel both excited and fearful at the mention of rolling positions, eager to try but worried about the risks. In fact, the rolling position strategy itself is not very risky; the key lies in the use of leverage. If used properly, risks can be fully controlled.
For example, if I have 10,000 in capital and open a position when a certain coin price is 1,000, I use 10x leverage but only 10% of total funds (i.e., 1,000) as margin, which means I’m effectively only using 1x leverage. If I set a 2% stop-loss line, should the market turn unfavorable, my loss is just 2% of that 1,000, which amounts to 200. Even in the worst-case scenario, triggering liquidation conditions would mean losing only that 1,000, not all my funds. Those who face liquidation often do so because they used excessive leverage or heavy positions, where even slight market fluctuations can trigger liquidation. However, by following this method, even in an unfavorable market, your losses remain limited. Therefore, whether you use 20x leverage, 30x, or even 3x or 0.5x, the key lies in using leverage reasonably and controlling positions.
The above is the basic operational process for rolling positions. Friends who are interested can take a closer look and research thoroughly. Of course, everyone may have different views; I’m just sharing my experiences without trying to persuade anyone.
How can small funds grow big? The effect of compound interest.
If you have a coin that doubles in value every day, after a month, its value will be astronomical. Doubling on the first day, again on the second day, and so on, the final number will be astonishing. This is the magic of compound interest. Even if you start with a small amount, as long as you keep doubling, you can eventually accumulate an impressive sum.
For those who don't have much capital but want to enter the market, aim for big goals. Many believe that small funds should engage in frequent short-term trading for quick appreciation, but in reality, medium to long-term trading may be more suitable. Rather than making small profits daily, it’s better to focus on achieving several times the growth with each trade; what we seek is exponential growth.
In position management, the first step is to diversify risks; don't put all your funds in one trade. You can divide your funds into three to four parts and only use one part for each trade. For example, if you have 40,000, divide it into four parts and use only 10,000 for each trade.
Use leverage moderately. For mainstream currencies, leverage should not exceed ten times, and for small coins, it should not exceed four times.
Adjust dynamically. If there's a loss, supplement with an equal amount from external sources; if there's a gain, withdraw some appropriately. In any case, don’t let yourself fall into a loss.
When your capital grows to a certain level, consider gradually increasing the amount for each trade, but don't add too much at once; proceed step by step.
Through reasonable position management and a steady trading strategy, even small capital can gradually achieve significant appreciation. The key is to patiently wait for the right timing and focus on the big goals of each trade, rather than small daily profits.
I understand that anyone can encounter liquidation. However, I still had gains from spot trading to offset the losses. I also don't believe that you didn’t gain anything from the spot you hold. My futures trading only accounted for 2% of my total capital; no matter how much I lose, I won’t lose it all, and the loss has always been within my control.
I hope we can all grow our funds like a snowball—getting bigger and bigger.
Throughout the investment process, Lao Bo will not only provide investors with analytical ideas, basic knowledge of market observation, and methods for using various investment tools but will also bring exciting fundamental interpretations, sorting through the chaotic international situation, and differentiating various investment forces.
Lao Bo only engages in real trading; the team is ready to ride the wave.
