Table of Contents: 1. Methods for small capital accumulation.
2. High capital practical operation for stable profits.
3. Core logic of investing in digital currencies.
Through fan circles, I understand that many ordinary people in the crypto space, even students, want to invest and profit. However, many do not truly understand how to invest in crypto.
First of all, investing in digital currencies is financial investment. Our goal is sustainable profits, achieving economic doubling within a certain time frame. If you always expect to get rich overnight from a single contract, watching the ups and downs daily, like gambling, you might as well play the lottery.
Besides waiting for opportunities, trading requires the ability to identify the magnitude of opportunities. You can’t always trade lightly, nor can you always trade heavily. Normally, play with small positions, and when a big opportunity arises, then bring out the heavy artillery.
For example, rolling positions is something you can only do when a big opportunity arises. You can't keep rolling. Missing an opportunity is okay because you only need to roll successfully three or four times in your life to go from zero to hundreds of thousands or even millions. A few million is enough for an ordinary person to join the ranks of the wealthy.
1. Rolling positions, applicable for small and medium funds.
Spot trading
Suppose today you only have $1,000, and Bitcoin is currently at $30,000. You believe Bitcoin is about to rise. If you buy in with $1,000 and it rises to $36,000, you earn $200. Because you only have $1,000, it must double for you to earn $200.
Occasionally earning small profits with stable bloggers is okay, but wanting to get rich?
So the goal for small funds is contracts.
Suppose you also believe that Bitcoin is about to rise +20%*5, your $1,000 earns $1,000.
But have you heard about advising people on contracts, that kind of thing?
Because contracts are not to be played with recklessly, there are methods to take small risks for big rewards.
In fact, rolling positions only need to pay attention to these few points:
1. Sufficient patience. The profits from rolling positions are enormous. As long as you can roll successfully a few times, you can earn at least tens of millions or even hundreds of millions. Therefore, you shouldn’t roll easily; look for high-certainty opportunities.
2. High-certainty opportunities refer to a drop followed by sideways movement, then breaking upward. At this time, the probability of following the trend is very high. Identify the trend reversal point and get on the train from the start.
3. Be patient, wait for opportunities, even if it's once a month or a few months, just keep rolling;
▼ Risks of rolling positions
Let’s talk about the rolling position strategy. Many people think it’s risky; I can tell you, the risk is low, much lower than the logic of opening futures positions.
If you only have $50,000, how to start with $50,000? First, this $50,000 must be your profit. If you are still losing, don’t bother looking.
If you open a position in Bitcoin at $10,000, set the leverage to 10x, and use the isolated margin mode, only opening 10% of your position, that means using only $5,000 as margin, which is equivalent to 1x leverage. If you set a stop loss at 2%, you would only lose 2%, just 2%? That's $1,000. How do those who suffer total losses end up losing everything? Even if you do lose, isn't it just $5,000? How can you lose it all?
If you got it right and Bitcoin rose to $11,000, you continue to open 10% of your total capital, similarly setting a stop loss at 2%. If you hit the stop loss, you still earn 8%. Where's the risk? Didn't they say the risk is huge? And so on...
If Bitcoin rises to $15,000 and you add to your position successfully, you should be able to earn around $200,000 from this 50% market movement. Seizing two such market movements could yield around $1,000,000.
There’s no such thing as compound interest. 100x is achieved through two instances of 10x, three instances of 5x, or four instances of 3x, not by compounding daily or monthly at 10% or 20%. That’s nonsense.
This content not only has operational logic but also contains the core internal principles of trading, which is position management. As long as you understand position management, you cannot suffer total losses.
This is just an example; the general idea is like this. The specific details still require personal reflection.
The concept of rolling positions itself is not risky; not only is it not risky, but it is also one of the correct ways to approach futures trading. The risk lies with leverage.
10x leverage can roll, and 1x can too. I generally use two to three times leverage. Seizing two opportunities is equivalent to dozens of times in returns. Even if you don't do well, you can use a fraction of leverage. What does this have to do with rolling positions? This is clearly your own choice regarding leverage. I have never said to use high leverage for trading.
Moreover, I always emphasize that in the crypto space, only invest one-fifth of your money, and only one-tenth of your spot funds for futures trading. At this point, the funds in futures only account for 2% of your total capital, and use only two to three times leverage. Also, only trade Bitcoin. You could say this minimizes risk to an extremely low level.
If you lose $200 from $10,000, would you feel heartbroken?
Overall, it’s about taking small risks for big rewards, enduring loneliness, finding opportunities, and learning position management. As long as you’re not unlucky, you will always have opportunities. Opportunities are given to those who think; relying solely on luck, whatever you earn will eventually return to zero.
Many people have misconceptions about trading, such as thinking that small funds should do short-term trading to increase capital. This is completely misguided thinking, trying to exchange time for space and hoping to get rich overnight. Small funds should actually focus on medium to long-term trading to grow.
First, honestly accumulate coins, hold onto spot for 3-10 years. Accumulate the right targets. There’s no way to not become wealthy. What are the best targets in the crypto space? Anyone in the crypto world knows, there’s no need to choose.
2. When you have a certain amount of capital.
Once you have capital, we indeed encounter contracts less often because I fear you might be tempted by the idea of making a billion from a million, which is a nice thought but very dangerous. Remember, we only use the money we earn to make more money, and we pursue stability. Stability isn’t absolutely 100%, but is relative to a certain period where we achieve overall profitability.
This is what spot trading and capital management look like.
▼ Capital management
Trading is not full of risks; risks can be mitigated through capital management. For example, I have a futures account with $200,000, and a spot account ranging from $300,000 to over $1,000,000. If opportunities are abundant, I invest more; if there are no opportunities, I invest less.
With good luck, you can earn over ten million RMB in a year, which is quite sufficient. If luck is bad and the worst-case scenario is that the futures account blows up, it doesn't matter. The profit from spot trading can compensate for the losses from futures liquidation. After compensating, you can reinvest. Isn't it possible that spot trading earns nothing in a year? With this level of capital, we can't be that unfortunate.
You can not make money, but you cannot lose money. That’s why I haven’t suffered a total loss for a long time. Moreover, in futures, I often save a quarter or one-fifth of my earnings separately. Even when profits are exposed, part of it will still be retained.
As an ordinary person, my personal advice is to use one-tenth of your spot position for futures trading. For example, if you have $300,000, use $30,000 for trading. Once exposed, invest the profit from spot trading back in. After you’ve experienced ten or eight failures, you will eventually grasp some insights. If you still haven’t figured it out, don’t play; this isn’t the right field for you.
3. Core logic.
If you just entered the crypto space, it’s best to watch how those bloggers and influencers analyze K-lines in live streams, discussing engulfing patterns and morning star formations.
These attract newcomers. In the crypto space, individual investments and technical analysis account for a small portion. Understanding it isn’t harmful, but it won’t significantly influence price movements (unless you’re a market maker; even with great skills, can you outperform the financial talents hired by market makers with salaries of tens of thousands?).
Real skills are position management, market information, market sentiment, and greed/fear index.
It’s very simple. Gather a community with a few old friends from the crypto space. The main reason is that in 2024, there’s a high probability of a bull market coming. In fact, bull markets have cycles, so investment requires patience. We are also waiting for the next opportunity.
We get favorable news from the media, then analyze whether we can utilize this favorable news (this indeed requires experience and time accumulation; newcomers can’t rush it). Once we confirm that we want to invest in this coin, how do we determine the entry point and manage our positions?
It’s very simple. When the news comes out, if 300 out of a thousand people ask if BTC can be traded, that’s good. When these 300 people ask if they should exit, while the other 700 ask if they can enter now, the fear factor has already risen, and the greed factor has reached its peak. This is another market sentiment signal.
This kind of thing cannot be understood through looking at charts or news. By the time you understand from news, it’s already too late. Therefore, we calculate mutual benefits. When both parties achieve financial freedom, we travel.
Finally, how to withdraw funds safely?
I always withdraw funds from Binance. Because I’ve withdrawn from other platforms and had my bank card frozen, Binance was also one of the first to offer a T+1 model, freezing merchant funds for one day. Money launderers wouldn’t dare leave their funds parked at Binance. I’ve sought large account managers for withdrawals at Binance, and I usually select merchants with slightly lower prices when withdrawing. Try to avoid the highest-priced options. Binance is relatively safe; this is based on my experience over the past year or two.
The market never lacks opportunities; the question is whether you can seize them. By working with experienced people and the right individuals, we can earn more! Keep up the speed!
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