Contract Rolling: The Precision Art of Riding Trends

The essence of rolling contracts lies in leveraging the compounding effect to capture strong trends, rather than blindly adding positions on unrealized profits, which can lead to compounding losses. Most people fail due to a misunderstanding of its essence. To achieve extraordinary profits, three iron rules must be strictly followed:

Core Principles:

Go with the trend: Only implement the rolling strategy within a clear and established trend channel. Blindly adding positions during a volatile market is akin to slow suicide.

Step-by-step layout: Each additional position should be an independent decision unit; emotional full-position chasing is strictly prohibited. The initial core position should be controlled at around 5% of total capital.

Lock in profits: Strictly execute “profit-locking stop-loss” (Trailing Stop), raising the stop-loss point with profits to ensure that the profits obtained are never given back as losses.

Capturing the Acceleration Phase:

90% of the profits in a trend often erupt during brief acceleration phases. Most people, however, are hesitant at the beginning of a trend and exit prematurely during mid-trend fluctuations, ultimately missing the main upward wave. Recognizing acceleration signals is particularly crucial:

After a strong price breakout from key resistance, confirm the pullback supports effectively (for example, retesting without breaking previous highs/breakout levels). A significant increase in trading volume indicates that large funds are continuously entering the market.

Operational Framework: Core Position + Satellite Position

Core Position (3-5 times the initial position): Established in batches during the early confirmation of the trend, forming the profit foundation.

Satellite Addition (Step-by-step increase): When the price breaks through new key resistance or confirms acceleration, gradually add small amounts (e.g., 3% of total position). As the trend progresses, implement a phased, step-wise reduction of position for profit-taking.

Deadly Warning:

Beware of profit backlash: Adding positions on unrealized profits without profit protection can wipe out all accumulated gains in one reversal. Greed will ultimately be punished.

Strictly adhere to discipline: When signs of trend termination appear (e.g., key support being broken, indicator divergence), exit decisively. The market rewards discipline, not blind bravery.

The benefit of rolling contracts lies in the extreme utilization of trends; the risk of rolling contracts arises from lax discipline. Adhering to the above rules is essential for building robust profits amidst turbulent market tides.

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