Watching many rolling positions in the square can yield great returns with small investments, but how should one roll positions?
Learn this rolling position strategy, and when the next black swan event occurs, you will be ready!
There are various strategies for rolling positions, some involve holding a single currency for the long term, while others switch between multiple currencies in a short time, but the core logic remains the same, all based on reinvesting profits.
Rolling positions can continuously amplify profits without an upper limit, especially when operating between multiple currencies, allowing for significant profits without needing much capital.
Contract rolling positions typically focus on going long, as the upward potential of cryptocurrencies is limitless, especially for certain altcoins, where some popular currencies can see intraday gains of 30-50%, or even 80%. In such cases, rolling positions can yield astonishing returns.
For example, with $50 and using 20x leverage, if the held currency experiences a 30% intraday increase and rolling positions are maintained throughout, the final profit could range between $6,000 and $10,000, which is nearly 200 times the initial $50 investment.
Of course, 20x leverage means a lower margin for error; unless it’s a consistently rising currency, a market retracement of about 4% can easily wipe out all profits (placing a breakeven stop loss).
Therefore, for beginners, it is recommended to use 5x or 10x leverage, which significantly increases the margin for error. Generally, strong currencies are unlikely to retrace more than 10% in the market, making it much less risky compared to using 20x leverage.
Of course, the potential profits will also decrease accordingly. Using 10x leverage and assuming a 30% increase, the final profit might be around $2,000 to $3,000, which is still quite good. It reflects the classic characteristic of contract trading: 'small investment, large returns', and is the allure of contract trading.
For contract trading, if you start with a large amount of capital, unless you possess strong technical analysis and risk management skills, you are likely to incur losses. Before developing these skills, the best approach is to use small amounts like $50-$100 for rolling positions in popular currencies, which is also the easiest way to achieve wealth transformation.
