When rolling a position, you must first protect the principal, try to control the multiple, and use more time to exchange for space.
If you want to roll over and make your first million in life, you must first overcome the problem of "holding profitable positions". If you run away after making a little profit, you will never make big money because you are not ruthless enough (remember)
Rolling over a position sounds scary, but in fact, another way of saying it is adding to a position with floating profits. This is much better. Adding to a position with floating profits is just a trading technique for contracts to magnify profits.
The leverage of rolling position does not need to be too high. It is not 10 times or 20 times. Generally, 3-5 times is enough. Rolling position is basically a trend order. It is not a one-time profit. A wave of rolling position may take 10 days or half a month, and the profit is several times or even dozens of times.
Types of suitable rolling positions
1. Long-term bottom fluctuations followed by volume increases.
2. Breakout at the weekly or daily level.
3. The first retracement in a bull market.
The capital for rolling positions must be your own funds, not borrowed, otherwise you won't be able to hold the positions.
Rolling position operation technique
In a trending market, after significantly profiting using leverage, the account margin increases, and the leverage of your position is forced to decrease. At this time, while ensuring profits, increase the position size to maintain leverage consistency, which is rolling positions. The following situations are suitable for adding positions.
1. In a trending market, a breakout from a high convergence pattern is suitable for adding positions. After the breakout, you can take profit on the added positions after experiencing a price increase.
2. In a trend retracement market, gradually add long positions at moving averages or important support levels.
Real account example
Let's take a look at a recent market suitable for rolling positions. This market broke through the daily trend line and the weekly level from November 5 to November 22, holding for 17 days and gaining 48%.
Assuming a capital of $7000 with 5x leverage to roll this wave of market, you first need to know how to calculate your initial position, additional position size, and leverage.
Initial position = Capital * Multiplier / Current Price
Additional position size = (Floating Profit + Capital) * Multiplier / Current Price - Initial Position
Leverage = Position / Margin
1) First position opening (long at 67000)
Initial position = 7000 * 5 / 67000 = 0.52 BTC
The price reached 76000, with a floating profit of 5720U.
At this point, your position's leverage has passively decreased, and you need to find an opportunity to add positions.
2) Rectangular fluctuation breakout (add long at 77200)
Additional position size = (5720 + 7000) * 5 / 76000 - 0.52 = 0.31 BTC
This 0.31 is the number of BTC to add to the position. Here, it is a fluctuating upward movement, which can be seen as a rectangular consolidation. Add to the position when it breaks above, at an addition price of 77200.
3) Sell the added position (reduce risk)
At this time, close 0.31 of the added BTC position, because you don't know how the market will develop. Sell near 90000 (it's impossible to sell at the highest point, so an average price is taken). At this time, the initial position is still in hand.
Account Floating Profit = 0.52 * (90000 - 67000) + 0.31 * (90000 - 77200) = 11960 + 3968 = 15928U
4) Triangle breakout (add long at 9200)
The market followed a triangular pattern, indicating continuation. Wait for an opportunity to continue adding positions.
Additional position size = (7000 + 15928) * 5 / 92000 - 0.52 = 0.73 BTC
5) Close all positions (Closing Price 99000)
Position Floating Profit = 0.52 * (99000 - 67000) + 0.75 * (99000 - 92000) = 16640 + 5110 = 21750
Account Remaining Capital + Initial Position Profit + First Rolling Position Profit + Second Rolling Position Profit = 32718U
Stop Loss
We opened a position at 67000, stopped loss around 64500, stop loss amount = 0.52 * 2500 = 1300, which means risking 1300U while earning 26308U in profit.
Thus, your capital increased from 50,000 to 190,000, nearly quadrupling.
If you seize another opportunity like this, your position could approach 1,000,000.
Therefore, by capturing trending markets, you can basically earn 1,000,000 in 2-3 waves.
Rolling Position Risk
Many people think that rolling position risk is very high, but it is actually much lower than opening small positions with 50 or 100 times leverage. Because the leverage is low, the risk you can bear is large; rolling positions should only be done when the market is correct, and stop loss when the market is wrong.