A very practical article to share with everyone, from Doug.
Table of Contents: 1. Methods to accumulate small funds and turn them around.
2. High capital practical stable profits.
3. The core logic of investing in digital currencies.
Many ordinary people in the crypto world, even students, want to invest for profits. But many people do not truly understand how to invest in crypto.
First, investing in digital currencies is financial investment. Our goal is to achieve sustained profitability and double our money within a certain period. If you always expect to get rich overnight with a single contract and watch the market rise and fall every day, that's no better than playing the scratch-off lottery.
In addition to waiting for opportunities, trading requires the ability to recognize the size of opportunities. You cannot always trade lightly or heavily; usually, play with small positions, and when a big opportunity arises, then pull out the heavy artillery.
For example, rolling positions means you can only operate when a big opportunity arises. You cannot always roll; it's okay to miss out because you only need to successfully roll three or four times in your life to go from zero to one million or even ten million. Ten million is enough for an ordinary person to upgrade to the ranks of the wealthy.
1. Rolling positions, suitable for small and medium funds.
Cash
Assuming you only have $1000 today, and Bitcoin is currently $30000, you believe Bitcoin is about to rise. If you invest $1000, and it rises to $36000, you earn $200. Because you only invested $1000, your gains only double when the price doubles.
Occasionally, it's okay to earn some pig's feet rice with stable bloggers, but if you want to get rich quick?
So the goal for small funds is contracts.
Assuming you also believe Bitcoin is about to rise +20% * 5, your $1000 earns $1000.
But have you heard of advising people to trade contracts? You know what I mean.
Because contracts are not just played around with; there are methods for taking small risks for large gains.
Actually, rolling positions only requires attention to these few points:
1. Enough patience; the profits from rolling positions are immense. As long as you can successfully roll a few times, you can earn at least tens of millions or even billions. Therefore, you cannot roll easily; you need to find opportunities with high certainty.
2. Opportunities with high certainty refer to a sharp drop followed by sideways consolidation, then a breakout. At this point, the probability of following the trend is quite high, so you must find the right reversal point and get in from the start.
3. Have patience and wait for opportunities, even if they come just once a month or a few months; only roll more.
▼ Rolling position risks
Let’s talk about rolling position strategies. Many people think this is risky, but I can tell you that the risk is very low, far lower than the opening logic of the futures you are playing.
If you only have $50000, how to start with $50000? First, this $50000 should be your profit. If you are still losing, just stop reading.
If you open a position in Bitcoin at 10000, set your leverage to 10x, and use the isolated margin mode, only opening 10% of your position, that means opening only 5000 as margin, which is actually equal to 1x leverage. With a 2% stop-loss, if you hit your stop-loss, you only lose 2%, just losing 2%? That's $1000. How do those who get liquidated actually get liquidated? Even if you get liquidated, isn't it just a loss of 5000? How could you lose everything?
Assuming you are correct, and Bitcoin rises to $11000, you continue to open 10% of your total funds, similarly setting a 2% stop-loss. If you hit the stop-loss, you still earn 8%. What about risk? Didn't they say the risk is very high? And so on...
If Bitcoin rises to $15000 and you manage to increase your position smoothly during this 50% market trend, you should be able to earn around $200000. Catching such trends twice would be around $1 million.
There is fundamentally no compound interest; 100x comes from two 10x, three 5x, or four 3x gains, not from earning 10% or 20% compound interest every day or month. That's nonsense.
This content not only has operational logic but also contains the core principles of trading—position management. As long as you understand position management, you will never go completely broke.
This is just an example; the general idea is like this, but the specific details need to be pondered by yourself.
The concept of rolling positions itself is not risky; not only is it not risky, but it is also one of the most correct approaches to futures trading. The risk lies in leverage.
10x leverage can roll, 1x can too, and I usually use 2-3x. If you catch it twice, isn't it the same as earning dozens of times? If worse comes to worse, you can use 0.x leverage. What does this have to do with rolling positions? This is clearly a matter of your own leverage choices; I have never said you should operate with high leverage.
Moreover, I have always emphasized that in the crypto world, only invest one-fifth of your money in cryptocurrencies, and only one-tenth of your cash in futures. At this point, the capital for futures only accounts for 2% of your total funds, and only use 2-3x leverage, and only trade Bitcoin. This can be said to minimize risk to an extremely low level.
Would you feel heartbroken if you lost 200 out of 10000?
Overall, it's about taking small risks for large gains, enduring loneliness, finding opportunities, and learning position management. As long as you are not a jinx, you will always have opportunities. Opportunities are for those who think; relying solely on luck means you'll earn and lose back the same amount, ultimately returning to square one.
Many people have many misconceptions about trading. For example, they think that small funds should trade short-term to grow their capital. This is completely a misconception; this way of thinking is just trying to exchange time for space, hoping to get rich overnight. Small funds should focus on medium to long-term trades to grow larger. Always remember, the smaller the funds, the longer the line you should take. Use compound interest to grow; don’t trade short-term for small profits.
First, honestly accumulate coins, hold cash for 3-10 years. Accumulate against the right targets. There is no way to be poor. What are the best targets in the crypto world? Anyone in the crypto community knows; there is no need to choose.
2. When you have a certain amount of capital.
With capital, we actually encounter fewer contracts because I fear you can't resist the idea of turning one million into one billion. It's a good idea, but very dangerous. Remember, we only use the money we've earned to make money, and we pursue stability. Stability is not an absolute 100%, but rather our overall profit over a period.
This is cash management.
▼ Capital management
Trading is not filled with risks; risks can be mitigated with capital management. For example, I have a futures account of $200000 and a cash account ranging from $300000 to $1 million. When there are great opportunities, I invest more; when there are no opportunities, I invest less.
With good luck, you can earn over ten million RMB in a year, which is quite enough. With bad luck, the worst-case scenario is that the futures account gets liquidated, but it doesn't matter; the profits from cash can compensate for the losses from the liquidation, and after compensating, you can jump back in. Is it really possible to earn nothing from cash in a year? With this amount of capital, we can't possibly be at such a low level.
It's okay not to make money, but you cannot lose money. That's why I haven't been liquidated for a long time, and I often save one-fourth to one-fifth of my profits separately. Even if I have a loss, I will retain part of the profits.
As an ordinary person, my advice is to take one-tenth of your cash position to trade futures. For example, if you have $300000, take $30000 to trade. Once exposed, invest the profits from cash into it. Once you’ve been liquidated eight to ten times, you should be able to understand something; if you still haven't figured it out, then don't play, this industry is not suitable for you.
Lastly, how to safely withdraw funds?
I withdraw funds all from Binance. Because I've withdrawn from other platforms before, and my bank card has been frozen. Binance was also the first to adopt the T+1 withdrawal model, which freezes a merchant's funds for a day. Money launderers dare not leave funds on Binance. I have consulted with a major account manager for withdrawals and generally choose slightly cheaper merchants for withdrawal. Try to avoid choosing the merchants with the highest prices. Binance is relatively safe; this is based on my experiences over the past year or two.
Of course, if you like cash and want to accumulate capital, click on my profile and follow me. For my fans, I will share my bull market strategy layout for free. I am a free blogger, only to gain followers.
Some people may ask why I share others' opinions. As an old trader with nearly ten years of experience, I only want to share better, valuable, and genuinely good things with everyone.
All traders are one family.
Follow@趋势狂人元寶 Share more good articles.