Today I learned about the rolling warehouse method and calculated the return rate; my heart raced with tension. I realized that I am not suitable for rolling warehouse.
The key to this method is predicting market trends, and it is only suitable for one-sided markets. Downtrends in the cryptocurrency world are swift and fierce, and rolling warehouse is more applicable in downtrends than in uptrends. Rolling warehouse places high demands on an individual's ability to seize opportunities; there are many opportunities for rolling warehouse in the cryptocurrency world, which are more about chance than pursuit. The rolling warehouse method is only suitable for extreme market conditions, especially during drastic crashes.
During the epic crash in the cryptocurrency world on May 19, 2021, internet celebrity Liangxi became rich and famous overnight by daringly shorting the market. Liangxi's short position of 1,000 yuan rolled into a fortune of 30 million yuan.
On May 11, 2022, the cryptocurrency known as 'the Maotai of the cryptocurrency world', Luna, collapsed. In just one month, Luna dropped from $119 to less than $0.0002, a staggering 99.99% loss, leaving countless people empty-handed overnight. This was also the best time to short Luna using rolling warehouse.
On November 9, 2022, the cryptocurrency world experienced a collapse. The global leading cryptocurrency exchange FTX, founded by SBF, and the hedge fund Alameda collapsed. Subsequently, the price of FTX's native token FTT plummeted by over 90%, directly leading to the collapse of the entire virtual currency market. Starting from midnight on November 9, the price of FTT fell sharply, dropping from a high of $17.71 to $4.6 in less than three hours, a decline of 74%. This was the best time to short FTT using rolling warehouse.
Also, the last rapid surge phase of Bitcoin in a bull market is the best time for rolling warehouse to go long. Conversely, the pullback phase after the market peak is the best time for rolling warehouse to go short.
Many friends still do not know what rolling warehouse is, so let’s repeat it.
Rolling warehouse is defined as 'small funds, high leverage, all in place, stop loss at liquidation, and adding positions with floating profits,' typically using 10 times leverage, with liquidation occurring at a 10% drop from the peak.
The advantage is that in a one-sided market, it can quickly achieve the myth of a hundredfold return. After using the rolling warehouse method, there is no longer fear of prices, because there is only one peak in a bull market; regardless of how much it corrects, it will rise again.
The downside is that it's a life-or-death gamble, effective only in a one-sided market. It must be done with small funds, where losses are manageable. It mainly relies on opportunity, and only a few insightful friends can achieve great success.
The difficulty lies in the fact that when opportunities arise, it tests one's courage and mindset.
Why start introducing the rolling warehouse method only recently? Because it is effective in bull market one-sided trends. Liangxi became rich overnight during the 519 event, ultimately realizing that it was the one-sided market that made him, while the non-one-sided market led to his downfall. Circumstances create heroes, and the same method can have vastly different outcomes in different market conditions. When the wind blows, even pigs standing at the wind outlet can fly; when the wind stops, it is the flying pigs that fall.
Common questions and answers about the rolling warehouse method.
How much capital is suitable for rolling warehouse? It is generally advisable to use small amounts of capital, typically choosing an amount that one can accept to lose, preferably not exceeding 10% of the principal.
What types of assets are suitable for rolling warehouse? Generally, it is applicable to large-cap assets that only rise and do not fall, and that are not easily manipulated, such as Bitcoin, Ethereum, and US stock indices; playing altcoins carries higher risks.
What leverage should be chosen for rolling warehouse? Generally, a leverage of 10 times is chosen, as a drop of 10% from the peak will lead to liquidation. The greater the leverage, the higher the risk.
How to operate rolling warehouse in the cryptocurrency world? Generally, the full position mode is chosen for contracts. If there are floating profits, they can be used as margin to add positions. Choosing the incremental position mode requires taking profits and closing positions before continuing to open new positions.
When to withdraw from rolling warehouse? Generally, when there are significant profits, one can first withdraw the principal, and later, when profits are even greater, one can withdraw part of the funds.
How powerful is rolling warehouse? Generally speaking, in a smooth one-sided market, a 50% increase can yield up to a 100-fold profit through rolling warehouse.
Remember, the rolling warehouse method is the fastest way to get rich. But it is only effective in one-sided markets, especially for small investors. It is the quickest way to achieve a turnaround and class leap. If retail investors want to learn, they might as well try it with 100 yuan. Once learned, it benefits for life. If not learned, the loss is minimal.
The rolling warehouse method can indeed lead to sudden wealth, but it is also very difficult, requiring experts who can seize opportunities. Otherwise, if leverage is not controlled well, a single correction can lead to liquidation.
A simpler explanation of rolling warehouse is: it feeds the bold and starves the timid. If rolling warehouse fails once, it's over. No matter how much was earned beforehand, a single failure means loss. The key is that rolling warehouse will repeatedly crush one’s mindset. The challenge lies in judging the large market trend. Literally, rolling warehouse means continuously rolling your positions.
Friendly suggestion: when judging that the market is favorable, rolling warehouse should still be used sparingly. Roll 2 to 3 times, and take profits when they arise. We often hear 'adding positions with floating profits,' but it is usually followed by 'losing everything.' This floating profit addition is not mindless rolling warehouse but rather rolling warehouse at critical moments.
The rolling warehouse method, simply put, is 'high leverage with small funds, all in place, stop loss at liquidation, and adding positions with floating profits.' The rolling warehouse method is a gamble with a high risk of failure; the vast majority of players will quickly lose everything. However, in a one-sided market, it is the fastest way to achieve a hundredfold return, representing the slim chance of survival in a life-or-death situation, and it is said that circumstances create heroes.
However, the rolling warehouse method is not easy to operate in practice. It requires courage, timing, and personal understanding. It is essential to remember key points: use small funds to roll, take more trial and error opportunities, use ten times leverage, and withdraw the principal after doubling, etc.
In my free time, I picked up 'Reminiscences of a Stock Operator' and began to seriously study trading books, exploring what the correct operating methods are, what seems correct but is actually wrong, and the pros and cons of each method, thereby creating a trading system tailored to the characteristics of the cryptocurrency world.
