Many crypto friends have privately messaged me asking how small capital can be traded to grow big. Many of them must have started from small capital. No one starts with large capital or all their possessions to trade crypto.
The knowledge point I want to discuss next is—rolling over.
How to roll over positions:
In the crypto world, you need to find a way to earn 1 million in capital. To grow from a few thousand to 1 million in capital, there is only one way.
That is rolling over.
Once you have 1 million in capital, you will find that your whole life seems different. Even if you don't use leverage, just holding cash will increase in value.
20%, then you have 200K. 200K is already the income ceiling for the vast majority of people in a year.
Moreover, when you can grow from tens of thousands to 100K, you will also grasp some thoughts and logic for making big money. At this time, your mindset will calm down a lot, and from now on, it's just about copying and pasting.
Don't always think about hundreds of millions or billions. Start from your actual situation. Bragging only makes you feel comfortable. Trading requires the ability to identify the size of opportunities. You can't always trade small positions, nor can you always trade large positions. Usually, trade small positions, and when big opportunities arise, bring out the big guns.
For example, rolling over positions is something that can only be done when there's a big opportunity. You can't always be rolling over; missing out isn't a big deal because in your lifetime you only need to roll successfully three or four times to go from zero to tens of millions. Tens of millions is enough for an average person to upgrade.
The ranks of wealthy individuals.
A few points to note when rolling over positions:
1. Sufficient patience; the profits from rolling over positions are huge. As long as you can roll successfully a few times, you can earn at least tens of millions or even hundreds of millions.
You can't easily roll over; you need to find high-certainty opportunities.
2. High certainty opportunities refer to the sideways consolidation after a sharp drop, followed by an upward breakout. The probability of trending up at this time is quite high.
Find the point of trend reversal and get on board from the beginning.
3. Only roll long;
▼ Rolling Over Risks
Let's talk about the rolling over strategy. Many people think this is risky. I can tell you that the risk is very low, far lower than the logic of trading futures.
If you only have 50K, how to start with 50K? First, this 50K should be your profit. If you are still at a loss, then don't look.
If you open a position of 10K in Bitcoin at 10x leverage, using isolated margin mode, and only open 10% of the position, that means using only 5K as margin, which is actually equivalent to 1x leverage. With a 2-point stop loss, if you hit the stop loss, you only lose 2%, which is just 2%? 1000 bucks. How did those who got liquidated end up losing everything? Even if you got liquidated, isn't it just a loss of 5K? How could you lose everything?
If you are right, and Bitcoin rises to 11K, you continue to open 10% of your total funds, also set a stop loss at 2%. If you hit the stop loss, you still earn 8%. What about the risk? Didn't they say the risk is huge? And so on...
If Bitcoin rises to 15K, and you successfully increase your position, during this 50% market movement, you should be able to earn around 200K. Catching two such movements could lead to around 1 million.
Compound interest does not exist. 100 times is earned through two rounds of 10 times, three rounds of 5 times, and four rounds of 3 times, not through earning 10% or 20% 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 cannot possibly lose everything.
This is just an example, the general idea is like this; the specific details still need to be pondered by yourself.
The concept of rolling over positions itself does not have risks. Not only is there no risk, but it is also one of the most correct approaches in futures trading. The risk lies in leverage. You can roll at 10x leverage or 1x just the same. Generally, I use 2-3 times leverage. Capturing two opportunities can yield dozens of times the profit, right? If worse comes to worst, you can use 0.1x leverage. What does that have to do with rolling over? This is clearly your own choice regarding leverage. I have never said to use high leverage to operate.
I have always emphasized that in the crypto world, only invest one-fifth of your money while only investing one-tenth of your cash funds in futures. At this time, the funds in futures only account for 2% of your total funds. Additionally, only use 2-3x leverage and only trade Bitcoin. You can say that this reduces the risk to an extremely low level.
If 2K from 100K is lost, would you feel the pain?
Always leveraging isn't interesting. There are always people saying that rolling over positions is risky, and that making money is just due to good luck. I'm not saying this to convince you or anyone else; I just hope that people with the same trading philosophy can play together.
It's just that there is currently no filtering mechanism, and there are always harsh voices appearing, disrupting the recognition of those who want to watch.
▼ Capital Management
Trading is not filled with risks. Risks can be mitigated through capital management. For example, I have a futures account of 200K and a cash account ranging from 300K to over 1 million. If there are great opportunities, I will invest more; if not, I will invest less.
With good luck, you can earn over 10 million RMB in a year, which is more than enough. With bad luck, the worst-case scenario is that your futures account gets liquidated. It doesn't matter; the profits from cash can compensate for the losses from the futures liquidation. After compensating, you can go back in. Is it really that you can't earn a single penny from cash in a year? I'm not that bad.
You can not make money, but you can't lose money. That's why I haven't been liquidated in a long time. Additionally, I often save a quarter or a fifth of my profits separately after earning in futures. If liquidated, the profits will still be retained.
As an ordinary person, my personal advice is to use one-tenth of your cash position to trade futures. For example, if you have 300K, use 30K to trade. If exposed, use the profits from cash to re-invest. After you have been liquidated ten or eight times, you should be able to grasp some inner workings. If you still haven't grasped it, then don't play; this industry may not be suitable for you.
▼ How to grow small capital
Many people have misconceptions about trading. For example, small capital should trade short-term to grow their funds. This is completely misguided thinking. This kind of mindset is trying to use time to exchange for space, attempting to get rich overnight. Small capital should focus on medium to long-term trading to grow.
Is one sheet of paper thin enough? A sheet of paper folded 27 times is 13 kilometers thick. If folded 10 more times, reaching 37 times, it's thicker than the Earth. If folded 105 times, the entire universe wouldn't be able to contain it.
If you have 30K in capital, you should think about how to triple it in one wave, and then triple it again in the next wave... This way, you will have four to five hundred thousand. Instead of thinking about making 10% today and 20% tomorrow... Doing that will eventually lead to self-destruction.
Always remember, the smaller the capital, the more you should trade long-term, relying on compounding to grow. Don't trade short-term for small profits. This article ends here. If you have read it, please give me some attention, and I will update more knowledge content in the future. This article is just my personal insights. Anything related to money is deceptive, so everyone in the crypto community, protect your wallets. Meeting adjourned.
