Many friends find the term 'rolling position' quite scary. In fact, it's just another way of saying: 'adding to a profitable position'. Doesn't that sound much better? 'Adding to a profitable position' is a very common operation technique in contract trading, and it doesn't require a very high leverage ratio.
Very suitable for friends who play contracts with low leverage, it can almost ensure the absolute safety of the position.
Three suitable situations for rolling positions:
1. Choosing a direction after a long-term sideways volatility at a new low
2. Buying the dip after a significant rise in a bull market
3. Breaking through major resistance/support levels on the axis
(Friendly reminder: only use funds that you can afford to lose to trade contracts)
What is rolling position?
In a trending market, after making significant profits using leverage, the overall leverage passively decreases. To achieve compound profit effects, increase the trend position at the 'appropriate time'. This process of increasing the position is called 'rolling position'.
The 'appropriate time' mentioned here refers to
1. Adding to the position during a convergence breakout in a trend, reducing the added position quickly after the breakout until the main upward wave
2. Increasing trend positions during a pullback in the trend, such as buying at the moving average during a pullback
Of course, successful rolling positions require very high market conditions. You might hit stop-losses 9 times out of 10 (this probability is actually lower in real trading because you can't catch every trend successfully). Therefore, rolling positions have high requirements for the risk-reward ratio. This means that to continuously experiment and catch trends, each time you roll a position, the size must be small. How small? Small enough that losing that amount of money wouldn’t hurt. This point is crucial and can be understood as the essence of rolling positions. The size of the initial position doesn’t matter; through rolling positions, a very small initial position can be turned into an infinitely large one, up to the point the exchange limits your position size. Rolling positions are a continuous trial-and-error process. The worst thing you can do is to go all-in with heavy bets on rolling positions; this discipline must be adhered to.
Everyone has a different way of trading contracts. The premise is to find a set of operations that belong to you, so you can be self-sufficient in the crypto world. Learning continuously to improve your trading methods is essential. Nothing should be rushed; being too impatient will only lead to confusion and irrational decision-making, which is the last thing we want to see.
Real investment is not just about accumulating money; it is more valuable to expand networks, broaden horizons, continuously upgrade life perspectives, enhance emotional intelligence in all aspects of life, and iteratively adjust values. Truly become the master of wealth.
