Step 1: Follow the rules - use rules to combat human weaknesses
In user cases, a brother was liquidated in three days with a full position and 20x leverage, directly exposing the biggest taboo of rolling positions: gambling without rules.
Core logic: Rolling positions is essentially a probability game, requiring rules to avoid emotional interference. It is recommended that the initial position ≤ 40% of total funds (e.g., 5000U first position 2000U), and do not add positions when losing to avoid the 'recouping mentality' that leads to loss of control.
Underlying principle: The 'loss aversion' effect in behavioral finance leads people to take risks when losing, and regulating positions can forcibly cut off the negative cycle.
Step 2: Withdrawal insurance - use mathematics to lock in risks
Users can reduce the risk of an 8000U account plummeting by following the 'daily drawdown ≤20%' rule, reducing it to controllable fluctuations.
Execution points:
Dynamic stop loss: Set a hard stop loss at 5% of net account value (e.g., for an 8000U account, the maximum loss in one day is 400U).
Forced shutdown: Pause trading after triggering a stop loss to avoid 'revenge trading' (in the case, a student improved their win rate by 37% after reviewing trades for 3 days).
Data support: Statistics show that accounts that strictly follow withdrawal rules have a survival rate 5.8 times higher than random traders within 6 months.
Step three: Trend filtering - only take high-certainty opportunities
'Do not trade what you do not understand' is the golden rule to avoid taking over bad trades.
Operational standards:
Technical aspect: Break through key resistance/support levels (e.g., BTC breaking through the previous high of $60,000), combined with trading volume increasing by more than twice.
Fundamentals: Choose assets with sector rotation logic (such as the MEME coin cycle starting signal in Q2 2024).
Counterexample: A student once suffered a 50% loss the next day due to chasing a chaotic 'scrap coin' after a price surge, validating the iron rule of 'better to miss than to make a mistake.'
Step four: Partial profit-taking - the underlying algorithm for letting profits run
'Taking profits off the table' is misunderstood as conservative, but it is actually the optimal solution for risk-reward ratio.
Strategy design:
Short-term: Close 50% of position when making a profit of 30-50 points (locking in basic profits).
Trend trade: Retain 30% position after 150 points, using a trailing stop loss (such as exiting when 80% of profits are retraced).
Mathematical advantage: Taking partial profits can increase win rate by 22%, optimizing the profit-loss ratio from 1:2 to 1:3.5.
Step five: Principal withdrawal - the nuclear weapon to break the 'zeroing cycle'
'Doubling must withdraw principal' is an anti-human but effective risk control design.
Execution case:
In the 10K → 50K stage, forcibly withdraw 80% of the principal (i.e., withdraw 8000U), and the remaining 20% profit continues to roll over.
Psychological basis: The pain from loss is twice the pleasure from equal gains; withdrawing principal can reduce anxiety.
Extreme test: If the 50K principal explodes, only profits are lost, not the principal, leading to a 60% decrease in psychological pressure.
Step six: Leverage restraint - dynamic balance of position and leverage
The key to long-term survival is that 'the larger the account, the lower the leverage.'
Position formula:
≤8000U: Single position ≤20% (e.g., 1600U), 3-5 times leverage.
>8000U: Single position ≤10% (e.g., 800U), 1-3 times leverage.
Counterintuitive design: Reducing leverage after account growth is actually using a 'profit safety net' to hedge against black swan risks (such as exchange downtime, contract liquidation).
Rolling positions underlying logic: Compound interest formula vs bankruptcy formula
Path to success:
5000U → (50% win rate × 1.5 times profit-loss ratio)^n → 10W
By using the six-step method, the win rate can be increased to 55% and the profit-loss ratio optimized to 2:1, requiring only 12 successful trades to achieve the goal.
Path to bankruptcy:
5000U → (30% win rate × 1 times profit-loss ratio)^n → 0
Random traders often fall into the 'small gains and large losses' trap, with a negative mathematical expectation.
Ultimate advice: First verify the six-step method with a demo account for 3 months, then gradually invest in a real account. The essence of rolling positions is to tame greed with rules, not to gamble on luck.
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