Discussing rolling strategies: many people think it’s high-risk, but if done properly, the risk is much lower than the logic of opening ordinary contracts.
First, clarify the premise: if you are currently in a loss state, it’s advised not to look at this; this article is only suitable for friends operating with profit funds - for example, if you have $50,000, this $50,000 must be profit you have already earned.
1. The core logic of rolling positions: use position management to lock in risks.
Taking $50,000 as an example, how can rolling positions help you get started?
Open a position when Bitcoin is at $10,000, using 10x leverage and a position-by-position approach, only opening 10% of your position (which is $5,000 margin). It seems like 10x leverage, but due to the low position, it equates to the risk of 1x leverage.
Set a stop loss of 2 points: even if you are wrong about the direction, the maximum loss will be 2% ($1,000); even in extreme cases of liquidation, you would only lose this $5,000 margin, and it’s impossible to lose everything.
Now let’s look at the profit situation:
If Bitcoin rises to $11,000 (up 10%), continue to open a 10% position of total funds, and also set a 2% stop loss. Even if this trade hits the stop loss, the previous profit can still leave you with 8%, keeping the risk manageable.
By analogy, if Bitcoin rises to $15,000 (up 50%), and you manage to increase your position, you could make around $200,000 from a $50,000 principal; catching two such market movements could bring you close to $1 million.
Don't fall for the 'compound interest myth': 100 times return isn’t achieved by accumulating 10% daily or 20% monthly, but rather through two 10 times, three 5 times, and four 3 times accumulations - this is the essence of rolling positions.
2. The truth about risk: the problem lies not in the strategy, but in leverage and position.
People always ask 'why do we get liquidated'; the root cause is actually high leverage + full positions:
I never recommend high leverage; I usually only use 2-3 times, or even 0.x times leverage for operations. 10x leverage can roll positions, and 1x leverage can also roll positions; the risk only depends on the leverage and position you choose.
In the cryptocurrency circle, there is an iron rule: only use 1/5 of total funds to invest in spot, and then use 1/10 of the spot funds to trade contracts. For example, if you have $1 million, invest $200,000 in spot, and at most $20,000 in contracts. Even if you lose this $20,000, the impact on total funds is minimal (2%), and it won’t hurt much.
3. Capital management: the 'amulet' of trading.
My practical logic:
Contract account with $200,000, spot account with $300,000 - $1 million + (put more in when opportunities are good, less when they are scarce). With good luck, you can make tens of millions in a year, but even if the contract gets liquidated, the gains from spot trading can make up for it, and you can restart - it's impossible to earn nothing from spot trading in a year.
Timely withdrawals after profits: every time you make a profit, withdraw 1/4-1/5 and keep it separately; even if you face liquidation later, you can still retain some profit.
Advice for ordinary people:
Use 1/10 of your spot position to trade contracts (for example, if you have $300,000 in spot, use $30,000 for contracts). If you get liquidated, use the profits from spot trading to cover, and after facing liquidation ten times or more, you will gradually learn the ropes; if you can’t learn, it indicates that you’re not suited for this field, so it's best to stop in time.
4. Turning small funds into big ones: don’t fall for short-term trading, rely on medium to long-term strategies to 'grow' your capital.
Many people are mistaken: small funds must trade short-term to grow. Wrong! Small funds should focus on medium to long-term, relying on 'doubling compound interest' rather than 'small profits'.
Is one sheet of paper thin enough? If folded 27 times, it would be 13 kilometers thick; if folded 37 times, it would exceed the Earth's diameter; if folded 105 times, it could fill the universe. Trading is similar:
With a $30,000 principal, first think about how to triple it to $90,000, then triple it again to $270,000, and then triple it once more to reach $810,000 - this is how to scale quickly.
If you are fixated on short-term gains of 10% or 20% every day, you are more likely to make mistakes due to frequent trading and end up losing.
5. The underlying logic of 'risk-free' contracts.
There are always people saying 'contract risks are high', but the risk is never in the tool, but in people. Contracts can definitely achieve 'low risk + good mindset':
Making money with other people's money: like Buffett and Soros's fund model, using clients' money to trade, with clients bearing the risk while you earn management fees (the premise is that you must first prove your strength, the same applies to trading in the cryptocurrency circle, but the threshold is high).
Using profits to trade contracts: for example, if you first invest $200,000 in spot trading and earn $50,000 in six months, you can use this $50,000 to trade contracts. Even if you incur losses, it's only a loss of profit and doesn't affect the principal, so your mindset remains stable.
Contracts never 'kill'; it’s greed that does - if you can't control your position and leverage it too aggressively, that’s where problems arise.
I am Xiao O, focusing on trading strategy analysis and teaching. As an analyst, my core role is to help everyone clarify their thoughts, control risks, and make money. If you are confused about positions and entangled in strategies, I will help you break through with my strength and be a reliable partner on your investment journey.