About futures
In a volatile market, buy high and sell low, operating daily. It seems like eating both long and short positions; a fierce operation like a tiger, but it's really just a 250. When the trend comes, you will miss out.
If you want to earn big money in futures, there is only one way:
Treating all market situations as trends, continuously losing in volatile markets, and then in trending markets, seizing the right opportunity and not taking profits is the core of futures trading.
Three applicable situations for rolling positions
Rolling positions sound scary, but if you put it another way, it’s just adding positions with floating profits. Saying it like this sounds much better; adding positions with floating profits is just a common technique in futures trading.
You don't need to maintain 5-10 times leverage; just two or three times is enough. The goal is to keep adding positions with floating profits while maintaining a total position of two or three times. Trading Bitcoin is relatively safe, and rolling positions are only suitable in three situations:
Choosing direction after a long-term sideways volatility new low
A significant drop after a big rally in a bull market to buy the dip
Breakthrough of major weekly resistance/support levels
You can only have a higher chance of winning in these three situations; all other opportunities should be abandoned.
(Tip: Only use money that you can afford to lose to trade futures.)
Fat guy's perspective:
Define rolling positions: In a trending market, after making substantial profits using leverage, due to the overall leverage passively decreasing, increase the trend position at the right time to achieve compound profit effects.
The process of increasing positions is called rolling positions.
The 'right time' defined here, I believe there are two main situations:
1. Increase positions in a converging breakout trend, and after the breakthrough, quickly reduce the added positions during the main upward wave.
2. Increase trend positions in a trend pullback market, such as buying in batches during moving average pullbacks.
Capital management
Trading is not full of risks; risks can be mitigated with capital management. For example, I have a futures account of 200K and a spot account ranging from 300K to over 1M randomly. If the opportunity is great, I invest more; if not, I invest less.
With good luck, you can earn over ten million RMB in a year, which is quite enough. In the worst-case scenario, if the futures account is liquidated, it doesn’t matter; the spot gains can compensate for the losses from the futures liquidation. After compensating, you can enter again. Is it really impossible to earn even a penny in spot in a year? I'm not that bad.
You may not make money, but you can't lose money, so I haven't been liquidated for a long time, and I often save a quarter or a fifth of my profits separately after making money in futures, even if I expose the profits, I will still retain part of it.
As an ordinary person, my personal advice to you is to use one-tenth of your spot position to trade futures. For example, if you have 300K, only use 30K to trade. If you expose it, then push the profits from the spot. After getting liquidated eight or ten times, you will surely figure out some tricks. If you still can't figure it out, then don't trade; it's not suitable for this field.
Rolling position risks
Let's talk about rolling positions; many people think this is risky. I can tell you that the risk is very low, much lower than the logic of opening positions in futures.
If you only have 50K, how to start with 50K? First, this 50K must be your profit. If you are still losing, then don’t look at it.
If you open a position in Bitcoin at 10K with a leverage of 10 times, using a sequential position mode, only opening 10% of the position, that is, only opening 5K as margin, this is actually equivalent to 1x leverage, with a 2% stop loss. If you hit the stop loss, you only lose 2%, just 2%? 1,000 bucks. How do those who get liquidated actually get liquidated? Even if you are liquidated, isn't it just a 5K loss? How can you lose everything?
If you are correct and Bitcoin rises to 11K, will you continue to open 10% of your total funds, with the same 2% stop loss? If you hit the stop loss, you still earn 8%. What about the risk? Didn't we say the risk is huge?
And so on...
If Bitcoin rises to 15K and you have increased positions successfully during this 50% rally, you should be able to earn around 200K. Capturing two such rallies would mean around 1M.
There is no compound interest; 100 times is achieved through two times 10 times, three times 5 times, and four times 3 times. It is not achieved by compounding 10% or 20% daily or monthly; that is nonsense.
This content not only contains operational logic but also embodies the core internal skills of trading, position management. As long as you understand position management, you will never lose everything.
This is just an example, the general idea is like this, specific details still need to be pondered over by yourself.
The concept of rolling positions itself is not risky; it is not only risk-free but also one of the most correct approaches to trading futures. The risk comes from leverage. You can roll with 10 times leverage, and you can also do it with 1x. I generally use two or three times; seizing two opportunities is still dozens of times return, right? If not, you can use 0.x leverage. What does this have to do with rolling positions? This is clearly your choice of leverage; I've never said to use high leverage for operations.
Moreover, I always emphasize that in the crypto space, only invest one-fifth of your money, and at the same time only invest one-tenth of your spot money to trade futures. At this time, the funds in futures only account for 2% of your total capital, and futures only use two to three times leverage, and only trade Bitcoin. You can say the risk is minimized.
Would you care if you lost 20K out of 1M?
If you are always leveraged, it becomes meaningless. There are always people saying that rolling position risks are high, that making money is just good luck. I’m not saying this to persuade you; persuading others is pointless. I just hope that those with the same trading philosophy can play together.
It's just that there is currently no filtering mechanism; there are always harsh voices that interfere with the recognition of those who want to watch.
Trading principles
There is a very important principle in trading: do not earn small money and do not lose big money.
Simply put in eight words, it's actually very difficult to achieve, for example:
You opened a position at 20K, and it rose to 21K right after. You are very happy and take profits, earning 5% happily. But then the market keeps rising to 25K… you earned 5% but missed 50%;
Then you tell yourself to earn big money, this time you definitely won't take profits. Then the market returns to 20K, and you open a position again, and it rises to 21K. You tell yourself to learn from the last lesson, hold on to earn big money, but then the market returns to 20K and even drops to 19.5K, and you hit the stop loss.
I'm having a hard time!
Many people live their whole lives in this kind of dilemma, constantly switching and never getting out.
Is there a way to make money in both big and small markets?
No, you must choose one. I usually choose not to earn small money.
What I said can’t be done 100%, and no one can do it 100%, but I can tell you the correct philosophy. How much you can achieve depends on personal cultivation. Each of us can only achieve a certain proportion of these philosophies; try to improve this proportion as much as possible.
Rolling position trading mentality
Whether you are trading short-term or long-term, making 200% in a big market wave, as long as you can maintain most of the profits, when you encounter a big opportunity next time to earn another 200%, this would be 4 times... As long as you can preserve profits, you can compound. If you earn 200% this time and then lose it back, what’s the use? There is no such thing as missing out in the trading market; there are only losses and gains.
Some people may feel they have found the right path and that they are about to get rich.
Finding the path only means that your probability of making money has increased.
In fact, this kind of operation requires a high level of mentality, patience, and courage.
1. Are you willing to patiently wait for a good position?
2. Better to miss out than to make a mistake. When a position shows significant profits, do you dare to give up profits to continue holding?
3. Can you boldly open positions without caring about the principal, even if you lose it all?
Anxiety from missing out, urgency to secure profits after making money, worry about losses after opening positions…
It takes a long time to cultivate; if you want to play, be cautious and strive for profits.
Of course, finding the path is much better than those who play blindly. Many people go their whole lives without finding out where the path is.
The core of making big money in the crypto space
In the crypto space, find a way to first earn 1M. If you only have hundreds of thousands and are just flipping every day, it’s really meaningless; you might as well work hard. This refers to making 1M from trading, not telling you to invest 1M. Without sufficient understanding, investing 10M will also lead to a complete loss.
Only when you have 1M, your perspective on trading will change, because once you have 1M in capital, even if you do spot trading and double it in a year, there will be 1M in profits. With a house in a first-tier city, an annual income of 1M can place you in China's top tier, which is something ordinary people can't spend all of.
To earn 1M, you only need to invest 50K, and this 50K can also be risk-free. You can first invest 100K, wait for an opportunity in the crypto space that wipes out retail investors, go in to buy spot and earn a profit of 100K, then use 50K of that profit to gamble. To earn big money, you must gamble; when good opportunities arise, roll positions, and using two or three times leverage a time or two can make you roll out.
If you lose 50K in profit, invest another 50K to gamble. If you lose all the profits, stop it and continue to use 100K principal to earn profits to gamble.
It sounds easy, but it requires an unimaginable level of patience.
This kind of model allows you to exist in the potential for getting rich in the crypto space without taking on the risk of major losses. Don’t believe in hoarding coins; without sufficient ability to earn money outside, hoarding coins is just deceiving retail investors. If others hoard 100 Bitcoins, you hoarding a few is nonsense. The volatility of Bitcoin has significantly decreased; you must use leverage to have a chance of getting rich. Those who hoarded coins two years ago have just returned to break even; those who invest regularly won't see several times returns at the peak of the bull market.
