Recently, the market has been experiencing severe fluctuations, causing many to question their lives. But have you noticed that some people not only didn't lose, but instead made a fortune during a market crash, even using a small position to leverage millions in profit?
The answer is two words: rolling positions.
This term sounds profound, but it is essentially an 'acceleration engine' in contract trading. Those who can roll positions cleanly capture the trend; those who can't, even if they see the right direction, may end up with nothing or even incur losses.
What is rolling positions?
In simple terms: rolling positions are about continuously locking in existing profits while establishing new, better positions when the trend hasn't fully played out, maximizing overall capital efficiency.
For example, if you short BTC at 12000 and it drops to 11500, you are already in profit. At this point, you close the original position and continue shorting at 11500. This way, you continuously adjust your position, lock in profits, and lower your risk.
The core logic of rolling positions.
1. Trend trading + Dynamic adjustment.
The prerequisite for rolling positions is having directional judgment. It’s not random rolling; it’s about acting in line with a clear trend. When the market goes down, each time you roll your short position, you are actually pocketing the 'earned money' while keeping hold of 'new opportunities.'
2. Efficiently utilize profits.
Assuming your capital is only 10,000, a successful roll can allow you to operate with the efficiency of 100,000. Profit reinvestment is not about aggressive doubling down, but about letting money grow while controlling risk.
3. Avoid the risk of liquidation.
Many people go all in when the market starts, only to get liquidated before they can make a profit. The rolling strategy allows you to maintain agility while capturing the trend, making it less likely for you to get washed out mid-way.
How to implement rolling positions in practice?
Step One: Determine if the trend is valid.
Use your familiar technical indicators, fundamentals, or market feel to confirm the direction. Rolling positions only suit strong trending markets; in a sideways market, you can easily get hit repeatedly.
Step Two: Gradual closing of positions at specific points + Opening new positions.
For example, if you start shorting from 12000 and close your original position when it drops to 11600, then reopen a short at 11600. This way, you capture the profit from 12000 to 11600 and start fresh from a new starting line.
Step Three: Position management must be stable.
Rolling positions is not mindless doubling down; just because you made money before doesn't mean you should double down later. Set reasonable profit-taking and stop-loss orders to ensure that even if a new position gets hit back, you won't lose all your previous profits.
Common misconceptions about rolling positions.
1. Frequent rolling can actually lose profits.
Some people roll positions at a 10-point drop, but they end up only getting the bones rather than the meat. Rolling positions require a sense of rhythm; wait for phase support/resistance before acting.
2. Rolling positions even when the trend is unclear.
Rolling positions during a sideways market is like suicide; it's easy to buy high and sell low, ultimately losing to transaction fees and slippage.
3. Roll even during losses.
Rolling positions is a strategy in a winning state; never use it in a losing state. Otherwise, you will keep losing more and more, creating a vicious cycle.
Why is rolling positions a hallmark of advanced traders?
Look at the people in the crypto world who truly make big money. They don't frequently change directions daily; instead, they firmly grasp a trend. Rolling positions is their tool for 'fully capturing a wave of market movement.'
In a continuous market crash or surge, a successful roll not only multiplies your earnings but also increases the distance between you and the market. It's like hitching a ride; once you're on board, you not only save effort but can also go further.
Summary:
Rolling positions is not a mystique; it's an advanced strategy built on trends + risk control + discipline.
Don't just keep shorting during a market crash without action; learn to roll positions, and perhaps you will be the next person to turn things around in a bear market.
