Here’s a very practical article to share with everyone, coming from Doug.
Table of Contents: 1. Methods for accumulating small capital.
2. Practical operations for high capital to achieve stable profits.
3. The core logic of cryptocurrency investment.
Many ordinary people in the cryptocurrency world, including students, want to invest and profit. But many do not truly understand how to invest in the cryptocurrency market.
First of all, cryptocurrency investment is a financial investment. Our goal is to achieve sustainable profits and double our capital within a certain time frame. If we always expect to get rich overnight by betting on contracts, constantly watching market fluctuations like a gamble, then we might as well just play the lottery.
In addition to waiting for opportunities, trading requires the ability to recognize the magnitude of opportunities. You cannot always trade small positions, nor can you always trade large positions. Generally, trade small positions and when a big opportunity arises, then you can bring out the big guns.
For example, rolling positions can only be executed when a big opportunity arises. You can't constantly roll; missing out is fine because in your lifetime, you only need to roll successfully three or four times to go from zero to hundreds of thousands or even millions. Millions are enough for an ordinary person to step into the ranks of the wealthy.
1. Rolling positions, applicable for small and medium capital.
Spot trading
Assuming today you only have 1,000, and Bitcoin is currently at 30,000. If you believe Bitcoin is about to rise, when you invest 1,000 and it rises to 36,000, you earn 200, because with just 1,000, your investment needs to double for you to earn 200.
Occasionally, trading with stable bloggers to earn a bit is fine, but if you want to get rich quickly?
Therefore, the goal for small capital is to engage in contracts.
Assuming you also believe Bitcoin is about to rise by 20% * 5, you would make 1,000 by investing 1,000.
But have you ever heard of warnings against contracts? You know, that sort of thing.
Because contracts are not played blindly; small bets for large gains also have methods.
Actually, rolling positions only requires attention to these few points:
1. Enough patience; the profits from rolling positions are enormous. As long as you can roll successfully a few times, you can make at least tens of millions or even billions, so you shouldn’t roll carelessly. You need to look for opportunities with high certainty.
2. Opportunities with high certainty refer to sideways consolidation after a sharp drop followed by an upward breakout. At this point, the probability of riding the trend is quite high. You need to pinpoint the trend reversal point and get on board from the start.
3. Have patience, wait for opportunities, even if they come once a month or every few months. Just roll more.
▼ Rolling Position Risks
Let's talk about rolling positions. Many people think this is risky, but I can tell you, the risk is very low, much lower than the logic of opening futures positions.
If you only have 50,000, how do you start with that? First, this 50,000 should be your profit. If you are still at a loss, then don’t bother looking further.
If you open a position at 10,000 for Bitcoin with 10x leverage, using a margin of only 5,000 (which is equivalent to 1x leverage), and set a stop loss of 2%, if you hit the stop loss, you only lose 2%, which is just 1,000. How do those who get liquidated end up losing everything? Even if you get liquidated, it’s just a loss of 5,000, right? How can you lose it all?
If you are right, and Bitcoin rises to 11,000, you continue to invest 10% of your total capital, also setting a 2% stop loss. If the stop loss is hit, you still earn 8%. What about the risks? Isn’t it said that the risk is very high? Continuing in this manner...
If Bitcoin rises to 15,000 and you manage to increase your position, during this 50% market surge, you should be able to earn around 200,000. Catching two such opportunities would mean around 1 million.
There is simply no such thing as compounding; 100 times is earned through two times 10 times, three times 5 times, or four times 3 times, not through earning 10% or 20% every day or month through compounding. That’s nonsense.
This content not only has operational logic but also contains the core principles of trading, such as position management. As long as you understand position management, you cannot lose everything.
This is just an example; the general idea is like this. The specific details need to be pondered over by yourself.
The concept of rolling positions itself carries no risk; not only does it have no risk, it's also one of the most correct approaches to futures trading. The real risk lies with leverage.
10x leverage can roll, and so can 1x. Generally, I use two or three times leverage. Catching two opportunities yields similar returns of dozens of times, right? Even if you use a fraction of a leverage, what's this got to do with rolling positions? This is clearly a matter of your own leverage choice; I have never said to operate with high leverage.
Moreover, I always emphasize that in the cryptocurrency market, you should only invest one-fifth of your money, and simultaneously only invest one-tenth of your spot capital in futures. At this point, the funds for futures only account for 2% of your total capital, and you should only use 2-3 times leverage, only trading Bitcoin, which effectively minimizes the risk.
Would you feel heartbroken if you lost 200 out of 10,000?
In summary, it's about small bets for large gains, enduring loneliness, finding opportunities, and learning to manage positions. As long as you are not a jinx, there will always be opportunities. Opportunities favor those who think. If you rely solely on luck, whatever you earn will eventually be lost, returning you to square one.
Many people have misconceptions about trading. For instance, they think small capital should focus on short-term trading to grow their capital. This is a complete misconception; this mindset aims to exchange time for space, trying to get rich overnight. Small capital should focus on medium to long-term strategies to grow. Always remember, the smaller the capital, the more you should focus on long-term investments, relying on compounding to grow, rather than chasing small short-term profits.
First, honestly accumulate coins, hold onto spot trading for 3-10 years. Hold the right targets. There is no one who won't become wealthy. What are the best targets in the cryptocurrency market? Everyone in the crypto community knows; there's no need to choose.
2. When you have a certain amount of capital.
With capital, we indeed encounter fewer contracts because I worry you might be tempted by the idea of making 100 million from 1 million. It's a good thought, but very risky. Remember, we only use the money we earned to make more money, and we pursue stability. Stability is not an absolute 100%, but rather our overall profit over a period.
This is spot trading and capital management.
▼ Capital Management
Trading is not filled with risks; risks can be mitigated with capital management. For example, I have a futures account of 200,000 and a spot account ranging from 300,000 to over 1,000,000. When opportunities are high, I invest more; when there are no opportunities, I invest less.
With good luck, you can earn over 10 million RMB in a year, which is more than enough. In the worst-case scenario, if your futures account gets liquidated, it doesn't matter; the profits from spot trading can compensate for the losses from futures liquidation. After compensating, you can jump back in—it's not like we can't earn anything from spot trading in a year, right? With this amount of capital, we can't possibly be that unlucky.
You can not make money, but you cannot afford to lose money. That’s why I haven’t been liquidated for a long time. Additionally, in futures trading, I often save one-fourth to one-fifth of my earnings separately, and even if I get liquidated, I will still retain part of the profits.
As an ordinary person, my personal suggestion is to use one-tenth of your spot position to trade futures. For example, if you have 300,000, then use 30,000 for trading. If you get liquidated, reinvest the profits from spot trading. After experiencing ten or eight liquidations, you'll eventually grasp some insights. If you haven't gotten it yet, then don't trade; this isn't the field for you.
Finally, how to safely withdraw funds?
I withdraw all my funds through Binance. Because I've withdrawn from other platforms where my bank card was frozen. Binance was also the first to implement the T+1 model, which freezes funds for a day, and money launderers wouldn't dare to leave funds on Binance. I’ve sought large account managers for withdrawals on Binance and usually select merchants with slightly lower prices for withdrawals. Try not to select the highest-priced withdrawals. Binance is relatively safe; this is based on my one to two years of withdrawal experience.
Of course, if you like spot trading and want to accumulate capital, stock up on spot trading in a bullish market by clicking on my profile, follow me. Concerning my fans, I will share my bullish market strategy layout for free, as a free blogger, only to gain followers.
Some might ask why I express others' opinions. As someone who has been trading for nearly ten years, I simply want to share better, valuable, and genuine things with everyone.
All traders are in the same boat.
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