How to Play with Contract Positions? A Step-by-Step Guide to the 'Rolling Position' Strategy (Simple Version)
What is 'Rolling Position'?
In a trending market, the process of gradually increasing the position to amplify profits while allowing the leverage ratio to decrease as profits grow, ultimately achieving a rolling increase in profits, is called 'Rolling Position'. In simple terms, it means 'when you make money, reinvest it, allowing profits to grow like a snowball'.
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Real Case of Rolling Position (An Example)
Assume you have 100,000 capital, operating a certain cryptocurrency, initial price 10 yuan, using 20x leverage to go long:
1. First Stage:
- Price rises by 5% → to 10.5 yuan
- Profit 100,000 × 5% = 50,000, total assets become 150,000
- At this point, roll the position: invest all 150,000, continue with 20x leverage to go long
2. Second Stage:
- Price rises another 5% → to 11 yuan
- Profit 150,000 × 5% = 75,000, total assets become 300,000
- Continue rolling the position: bet all 300,000, 20x leverage
3. Third Stage:
- Price rises another 5% → to approximately 11.58 yuan
- Profit 300,000 × 5% = 150,000, total assets become 600,000
- Continue rolling the position: bet all 600,000, 20x leverage
Continuing this way, every 5% increase adds to the position, ultimately:
- When it rises by 20%: total assets approximately 1.6 million
- When it rises by 25%: approximately 3.2 million
- When it rises by 30%: approximately 4.35 million
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Key Rules: The 'Correct Posture' for Rolling Positions
1. Only operate in a clear trend
- The premise for rolling positions is a 'certain trend', such as a channel where prices are continuously rising or falling.
- Don't roll in a choppy market: frequently increasing positions during sideways movement will only increase fees and risks.
2. Conditions for Adding Positions
- Must wait for the previous position to have stable unrealized gains: for example, only add once every 5% increase.
- Don't be greedy: the larger the increase, the higher the risk of correction, be cautious in later stages.
3. Risk Control
- Set stop-loss: even in an upward trend, set a stop-loss level to prevent trend reversal.
- Don't roll everything to the end: leave some funds for unexpected situations, such as sudden changes in market sentiment.
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Why Do Many People Fail with Rolling Positions?
- Captured by emotions: seeing a rise and crazily increasing positions, seeing a drop and stubbornly holding on.
- Mistaking choppy markets for trends: forcing a roll during sideways movement results in wasted fees.
- Using too much leverage: for example, using 100x leverage, one fluctuation can lead to liquidation.
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Summary: The Core of Rolling Positions is 'Stability'
1. Use only in major trends, don't act on small fluctuations.
2. Add positions in batches, don't go all in at once.
3. Always be ready to stop-loss, stop immediately if the trend reverses.
Remember: Rolling positions are not a 'gamble', but a disciplined approach to gradually accumulate profits. When market sentiment fluctuates, never act impulsively — because if you judge wrongly, you may lose back all the profits you’ve made previously.
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