Rolling position is a high-yield operation, but it also carries extremely high risks, so caution is necessary. The combination of rolling position (exponential growth) + compound interest model is the high cost-performance strategy. Note that rolling position is exponential growth, and compound interest is a special manifestation of exponential growth. In other words, all compound interest is exponential growth, but not all exponential growth is compound interest. Spot trading is the compound interest model, while futures are more like linear growth models. In summary, effective calls (unrealized profits) are the core of rolling positions and compound interest!

Now let's officially talk about rolling positions.

5000 principal, 10 times leverage, a wave of 100% increase, the final profit is 5 million, this is rolling position.

Floating profit position building is not rolling position. Because the current definitions and methods of rolling positions in the market are all directly copied and pasted from Fat House, Bitcoin Emperor, and Tony's views, it is still not straightforward enough for novices with little investment experience. This article aims to explain in a simple and straightforward manner.

Assume BTC current price is 10000, build position 5000, with 10 times leverage. At this point, BTC rises to 11000, with an increase of 10%, and you profit 5000. OK, the next operation is very important.

1. The method of floating profit position building is to add another 5000, then BTC rises to 12000, and increases by 10%. At this point, your total capital plus profit is 25,000. (Principal two 5000 + profit three 5000)

2. The method of rolling position is to close the previous position, with a total of 10,000 including capital and profit, then build a new position. Later, BTC rises to 12000, with the same increase of 10%, at this point, your total capital plus profit is 20,000.

Looking at it this way, is there any difference? But as long as you keep operating in a loop, when BTC rises to 20000, the increase is 100%. The final total capital plus profit for floating profit position building is 325,000 (which includes 50,000 principal). The total capital plus profit for rolling position is 5.12 million (which includes 5,000 principal).

Why is there such a big difference? Let's analyze it together.

What is a complete position building cycle?

Position building → floating profit → floating profit → closing the position

What is a complete floating profit position building cycle?

Position building → floating profit → adding positions → floating profit → closing the position

What is a complete rolling position cycle?

Position building → floating profit → close position and build position again → floating profit → close the position

OK, here are two more concepts, also explained in an easy-to-understand way. One is linear growth, which is an increase of 10%, 10%, 10%. The other is exponential growth, which is an increase of 10%, 20%, 40%, 80%. Linear growth is like driving a car, smoothly accelerating from 10 to 20 to 80. Exponential growth is like the development of technology, which increases by multiples; it starts slowly but accelerates faster over time. Here’s a rough example for easier understanding: based on solid evidence, humans fully mastered fire 400,000 years ago, mastered electricity 200 years ago, cars about 100 years ago, the internet 55 years ago, and mobile internet 30 years ago. This means that after electricity was mastered, human technology developed rapidly. Comparing this with the previous 400,000 years is like playing around. I digress, back to the point.

Here, let's make another analogy:

Ordinary position building is linear growth; strictly speaking, contracts are not linear, but let's use this analogy for easier understanding.

Floating profit position building is adding positions on top of linear growth.

Rolling position is exponential growth by multiples.

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