Today I learned about the rolling position method and calculated the return rate; my heart raced with anxiety. I personally am not suited for rolling positions.
The key to this method is predicting market conditions, and it is suitable only for one-sided markets. The cryptocurrency market's declines are fast and fierce, making downtrends more applicable than uptrends. Rolling positions require a high ability to grasp timing, and there are many opportunities for rolling positions in the cryptocurrency market, which are often serendipitous. The rolling position method is only suitable for extreme market conditions, especially during extreme crashes.
During the epic crash in the cryptocurrency market on May 19, 2021, the online celebrity Liangxi became rich overnight and gained fame by boldly shorting. Liangxi's short position grew from 1,000 yuan to 30 million yuan through rolling positions.
On May 11, 2022, the cryptocurrency known as 'the Maotai of the crypto world', Luna, collapsed. In just one month, Luna dropped from $119 each to less than $0.0002 each, plummeting by 99.99%, causing countless people to lose everything overnight. This was also the best time for shorting Luna with rolling positions.
On November 9, 2022, the cryptocurrency market crashed. The global leading cryptocurrency exchange FTX and hedge fund Alameda, founded by SBF, collapsed. Subsequently, the price of FTX's platform token FTT plummeted by over 90%, directly leading to the collapse of the entire virtual currency market. Starting from 12:00 AM on November 9, the price of FTT plummeted from a high of $17.71 to $4.6 in less than 3 hours, a drop of 74%. This was the best time for shorting FTT with rolling positions.
Also, the final surge phase of Bitcoin in a bull market is the best time for rolling positions to go long. The phase of a peak followed by a drop is the best time for rolling positions to go short.
Many friends still don’t know what rolling positions are, let’s repeat.
Rolling positions are defined as 'small capital, high leverage, all-in on the spot, stop-loss on liquidation, and adding positions on floating profits', generally choosing 10x leverage and a 10% drop at the peak will lead to liquidation.
The advantage is that in a one-sided market, it can quickly achieve hundredfold results. After using rolling positions, there is no longer fear of prices, because there is only one peak in a bull market; regardless of how much it pulls back, it will rise again.
The downside is that it is fraught with danger and is only effective in a one-sided market; it must be used with small capital so that losses are manageable. It mainly depends on opportunities, and only a few perceptive friends can achieve great success.
The challenge lies in the opportunity testing courage and mindset when it arrives.
The reason for introducing the rolling position method recently is that it is effective in a bull market with one-sided conditions. In the cryptocurrency market, Liangxi became rich overnight on May 19, ultimately realizing that it was the one-sided market that made him; a non-one-sided market destroyed him. Circumstances create heroes, and the same method can have vastly different outcomes in different market conditions. When the wind blows, even pigs can fly if they are at the right spot, but once the wind stops, those flying pigs will fall to their doom.
Frequently asked questions about the rolling position method.
How much capital is suitable for rolling positions? Answer: Rolling positions are suitable for small amounts of capital, generally choosing an amount that one can afford to lose, preferably not exceeding 10% of the principal.
What types of assets are suitable for rolling positions? Answer: Generally applicable to large market capitalization assets that only rise and do not fall, and are not easily manipulated, such as Bitcoin, Ethereum, and US stock indices; trading altcoins carries higher risks.
What leverage should be chosen for rolling positions? Answer: Generally choose 10x leverage, with liquidation occurring at a 10% drop from the peak; the higher the leverage, the greater the risk.
How to operate rolling positions in the cryptocurrency market? Answer: Generally choose the full contract mode; if there are floating profits, they can be used as margin to add positions. Choosing the incremental position mode requires closing profitable positions before continuing to open new positions.
When should profits from rolling positions be withdrawn? Answer: When there are significant profits, one can first withdraw the principal, and when the profits are larger later on, part of the funds can be withdrawn.
How powerful are rolling positions? Answer: Generally, in a smooth one-sided market, if it rises by 50%, rolling positions can yield up to 100 times profit.
Remember, the rolling position method is the fastest way to get rich, but it is only effective in a one-sided market. Especially for small retail investors, it is the quickest way to turn around and cross social classes. If novice investors want to learn, they might as well take out 100 yuan to try. If learned, it will benefit them for a lifetime; if not, they will only lose a little.
The rolling position method can indeed lead to sudden wealth, but it is also very difficult and requires a skilled person who can seize opportunities. Otherwise, if leverage is not controlled well, a single pullback can lead to a total loss.
A simpler explanation of rolling positions is 'the bold get rich, while the timid go hungry'. If a rolling position fails once, it's game over. No matter how much was earned before, as long as there is one failure, it's game over; the key is that rolling positions can repeatedly undermine one's mindset. The difficulty lies in judging the larger market trends. The literal meaning of rolling positions is to continuously roll your positions forward.
Friendly advice: When the market conditions are good, rolling positions should still be used sparingly, ideally 2 to 3 times, and then take profits. We often hear 'floating profits add positions', but it is often followed by 'losing it all in one go'. Here, floating profits adding positions is not mindless rolling, but rolling at critical moments.
The rolling position method, simply put, is 'small capital, high leverage, all-in on the spot, stop-loss on liquidation, adding positions on floating profits'. The rolling position method is fraught with danger, and the vast majority of players will quickly lose everything, but in a one-sided market, it is the fastest way to achieve a hundredfold return; it is the so-called door to survival in dire situations.
However, in practice, the rolling position method is not easy to operate; it requires courage, a keen sense of timing, and personal insight. Remember the essentials: use small capital for rolling, make use of trial and error opportunities, use tenfold leverage, and withdraw principal after doubling, etc.