In the cryptocurrency circle, one must find a way to accumulate 1 million in capital. If starting from just tens of thousands, there is only one viable path to accumulate this 1 million.
That would be rolling positions.
When you have 1 million in capital, you will notice that your living conditions seem entirely different. Even if you do not use leverage, simply holding spot, a 20% increase can yield 200,000. Keep in mind that 200,000 is already at the top level of annual income for the vast majority of people.
Moreover, once you can accumulate from tens of thousands to 1 million, you will start to understand the ways and logical thinking behind making big money. At this point, your mindset will stabilize a lot, and you can just follow the successful model to operate in the future.
Don't always talk about millions or hundreds of millions. You still need to base your actions on your actual situation. Bragging is just self-deception. During trading, one must possess the ability to discern the size of opportunities. You can't always trade lightly, but you also can't always go heavy. Usually, small trades are fine, and when a prime opportunity arises, then you can strike hard.
Take rolling positions for example; this should only be done when major opportunities arise. Do not operate frequently. Even if you miss an opportunity, it’s not a big deal. After all, if you only successfully operate rolling positions three or four times in your life, you can go from being broke to having millions. Entering the million ranks means successfully transitioning from an ordinary person to a wealthy person.
Several key points for rolling positions:
The key points are as follows:
1. Be patient! The profits that rolling positions can bring are extremely rich. As long as you can successfully operate a few times, earning tens of millions or even hundreds of millions is not a problem. Therefore, do not casually open rolling positions; you must seek opportunities with high certainty.
2. High certainty opportunities! This refers to when the coin price has gone through a sharp decline and enters a consolidation phase, followed by an upward breakthrough. At this point, the probability of the market developing an upward trend is very high. You must accurately identify the key points of trend reversal and enter the market to layout immediately.
3. Only engage in bullish operations;
Rolling position risk analysis
Let's talk about rolling position strategies. Many people think this approach is risky, but in reality, it's not. Compared to the conventional logic of trading futures, the risks of rolling positions are much lower.
For example, if you only have 50,000 at hand, how do you start from there? First, this 50,000 must come from your profits. If you are in a loss situation, then don’t consider rolling positions.
If you open a position when Bitcoin is priced at 10,000, set the leverage to 10 times, and use a cross-margin mode, only opening 10% of the position, which means only using 5,000 as margin. This operation is equivalent to 1x leverage. Set a stop loss at 2 points, and if the stop loss is triggered, the loss would only be 2%, amounting to just 1,000. How do those who get liquidated do it? Even if you are unfortunate enough to get liquidated, you would only lose 5,000, how could you lose all your capital?
If the market trend aligns with expectations and Bitcoin rises to 11,000, you then take out 10% of your total funds to open a position, also setting a 2% stop loss. In this operation, even if the stop loss is triggered, you would still gain 8% overall.
If Bitcoin rises to 15,000 and the accumulation process goes smoothly, facing a surge of up to 50%, you could earn around 200,000. If you can seize two such excellent market opportunities, you could accumulate around 1 million.
There is no such thing as a compound interest myth. Achieving a 100-fold increase in assets depends on accumulating through two 10-fold returns, three 5-fold returns, four 3-fold returns, etc., rather than relying on a stable 10% or 20% monthly compounding. Such statements are purely nonsense.
The above is just an example to illustrate, the general idea is like this. The specific operational details still rely on your own diligence and exploration.
The concept of rolling positions itself does not carry significant risk; not only is there no risk, but it is also considered one of the most correct and reasonable ideas in futures trading. The real risk lies in the use of leverage.
10x leverage can be used for rolling positions, and 1x leverage is also feasible. Personally, I usually choose two or three times leverage for my operations. By catching two favorable market conditions, isn't it possible to reap dozens of times returns? If all else fails, using 0.x leverage is also acceptable. This has nothing to do with the rolling strategy; in the end, it's merely a personal choice regarding the leverage multiple. I have never encouraged anyone to take high-leverage risky operations.
I always emphasize that in cryptocurrency investments, the amount invested should be controlled at one-fifth of your total assets. At the same time, only one-tenth of the spot assets should be used for futures trading. Under this operation, the futures account funds only occupy two percent of the total funds, and futures trading should only use two or three times leverage, focusing solely on Bitcoin trading. This way, risks can be kept at a very low level.
There are always people claiming that rolling positions are extremely risky, saying that making money purely depends on luck. I am not saying this to forcefully convince anyone. If you keep trying to persuade others, you might end up in meaningless arguments! I just hope to move forward hand in hand with partners who share the same trading philosophy!
It's just that there is currently a lack of an effective screening mechanism. There are always some discordant voices that interfere with the judgment and recognition of those who genuinely want to explore and learn.
The way of capital management
Trading is not always fraught with hidden risks. Risks can be mitigated with reasonable capital management techniques. For instance, I have 200,000 in my futures account, and my spot account fluctuates between 300,000 and over 1 million. When I see good opportunities, I invest more; if there are no opportunities, I invest less.
When luck is on your side, earning over 10 million RMB in a year can be quite effortless, which is already sufficiently rich. If luck is not good, the worst outcome is just losing all in the futures account, but that's not a big deal since the gains from the spot account can completely cover the losses from futures liquidation. After compensating, you can invest again as needed. Is it possible that the spot account doesn't earn a single penny throughout the year? I haven't fallen to that level yet.
You can afford not to profit, but try not to lose. Because of this, I haven't encountered a liquidation situation for a long time. After making profits in futures trading, I often withdraw a quarter or one-fifth of the profits to store separately.
For ordinary investors, my personal suggestion is to take out one-tenth of the spot assets to test the waters in futures trading. For example, if you have 300,000 in spot assets, take out 30,000 to invest in futures. If you get liquidated, use the profits from the spot to cover the losses. By experiencing a few rounds of liquidation and review, you will surely discover some techniques. If you still can't grasp it, it indicates that this field may not be suitable for you.
Many people have misunderstandings about trading. For example, they believe that small funds can only achieve rapid capital growth through short-term operations. This is a completely erroneous perception. This idea essentially tries to use invested time to gain wealth, thinking about getting rich overnight. In reality, small funds are more suited for medium to long-term investments to achieve asset growth.
Isn't a piece of paper thin enough? If you fold a piece of paper 27 times, its thickness can reach 13 kilometers. If you fold it 10 more times, totaling 37 folds, its thickness would be beyond what the Earth can contain. If you fold it 105 times, even the entire universe wouldn't be able to contain it.
If you only have 30,000 in capital, you should think about how to achieve a threefold increase in assets, and then another threefold increase in the next round... By doing this, you can accumulate to 400,000 or 500,000. Don't be thinking about earning 10% today and then 20% tomorrow... Such aimlessness and impatience will eventually exhaust your capital.
Always remember, the smaller the capital, the more you should focus on long-term investments, achieving wealth growth through asset doubling and compounding. Do not just focus on short-term trading to earn that little profit.
If you still feel confused and don't know how to start in this market, comment 333 to get on board!
