What exactly is rolling warehouse? How to operate? A clear explanation

First, let's summarize: rolling warehouse is a high-yield operation, but it also carries extremely high risks, so caution is essential. Rolling warehouse (exponential growth) + compound interest model is a cost-effective strategy. Note that rolling warehouse is exponential growth, while 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 a linear growth model. In summary, effective calls (unrealized profits) are the core of rolling warehouse and compound interest!

Floating profit increasing positions is not rolling warehouse. Because the current definitions and methods of rolling warehouse in the market are all directly copied and pasted from the views of fat house, Bitcoin Emperor, and Tony, it is still not easy to understand for novices with little investment experience. This article aims to explain in a straightforward and simple manner.

Assuming the current price of BTC is 10000, building a position of 5000, with 10 times leverage. At this point, BTC rises to 11000, an increase of 10%, resulting in a profit of 5000. OK, the next operation is very important.

1. The method of floating profit increasing positions is to add another 5000, and then BTC rises to 12000, increasing another 10%, at this point, your total capital including profits is 25,000. (Principal two 5000 + profit three 5000)

2. The method of rolling warehouse is to close the previous position, with total capital including profits of 10000, then build a position again. Subsequently, BTC rises to 12000, with the same increase of 10%, at this point, your total capital including profits is 20,000.

At first glance, is there really no difference? However, as long as you keep operating in a loop, when BTC rises to 20000, the increase is 100%. The total capital including profits from floating profit increasing positions is 325,000 (including 50,000 principal). The total capital including profits from rolling warehouse is 5,120,000 (including 5,000 principal).

Why is the difference so significant? Let's analyze it together.

What is a complete position building cycle?

Building position → Floating profit → Floating profit → Closing position out

What is a complete floating profit increasing positions cycle?

Building position → Floating profit → Increasing position → Floating profit → Closing position out