A simpler explanation of rolling over is: the bold get rich, the timid go hungry.
The rolling method: In 2018, I only knew of one wave of market, and two people became rich with this method~ It really is possible to get rich from just one wave, but more often, it leads to losses.
It’s easy to talk about rolling over; many people who play futures like to casually say it without looking at the market, whether to roll over or not, it’s just based on mood... The two relatively good rolling opportunities in 2018 were in April for EOS and the following BCH rally.
If a roll over fails once, it’s game over... No matter how much you made before, just one failure means game over, and the key is that rolling can continuously put you in a disadvantageous position.
The difficulty lies in judging the major market. Enough talk, let me explain in detail the use of the rolling method and the judgments involved.
The literal meaning of rolling over is to keep rolling your positions. Let’s take an example: when EOS is at $2, we judge that a significant market is coming, and we believe EOS will reach 1000 RMB!!!!
So I choose to go long on EOS at $2, assuming I use 100 EOS. With 20x leverage, when EOS reaches $2.1, I will already have 200 EOS. At this point, I choose to close the position. Then I use 200 EOS to go long at $2.1. When EOS reaches about $2.205, I will have 400 EOS... Continuing to roll like this~ I’m not joking, when EOS hasn't reached 1000, when it reaches 150, how much money do you think it could be? Scary, right? This is only considering a principal of just 100 EOS.
As for regular futures, when EOS reaches $2.205, you will have about 300 EOS. This has already widened the gap by 100 EOS, and we have only rolled over once. Everyone knows how high this compound return can be.
Of course, it also comes with enormous risks!!!! If: We start with 100 EOS at $2, continuously rolling over. When EOS reaches 150 RMB each!!! We are already fantasizing about a beautiful future. We hold countless EOS and choose to go long again at 150, after all, EOS is supposed to reach 1000 each in 2018. Suddenly: we can’t move~ The star halo disappears~ It crashes, in a bull market, your mind is filled with fantasies, if you’re not careful... it’s game over... all success falls apart.
Regular futures: At this time, even if it falls after opening at $2, when it drops to 150, there is still a huge amount of room and time to take profits!!! And it’s quite a lot, just a bit less than rolling over!
Rolling is like this, one mistake can lead to irreversible consequences~ Of course, you say, what if I judge the market correctly? Such markets only appear in extreme situations, meaning bull markets or a coin single flying~ Don’t try to argue with me about continuous drops and short selling rolls. I’ll say again, a continuous drop, to me, is neither a bear market nor a bull market! It’s just a bull market that doesn’t belong to the novices.
Coin single fly~ I witnessed a novice making a fortune with BCH during that wave... He really knew nothing, just simply asked me about the rolling operation, and anyway, he opened with a negative of over 40%, not caring, not looking... In the end, he rolled from 50,000 RMB to nearly 3 million in just one week... during that BCH surge.
You say he is good at judging the market? No, he knows nothing, doesn’t even look at K-lines, just mindlessly rolls over... Until he sees a lot of money and has to settle. He only takes money out to spend after closing. Do you think anyone can always judge the market correctly? Is there no mistake along the way? I don’t believe it... There will always be mistakes.
So: A friendly suggestion: When judging that the market is good, roll over less, only do it 2 or 3 times, and take profits when you can. If we equate commodity futures to the spot market of digital currencies, the risks are quite similar. Therefore, digital currency futures are greater than the spot of digital currencies! The risk of rolling futures is still far greater than the risk of digital currency futures.
