Why do so many people still like rolling positions
The core of the rolling position strategy lies in the prediction of market trends, which is only applicable to one-way markets. In the field of cryptocurrency, the market often falls rapidly and violently. Compared with the rising market, the rolling position strategy has more advantages. Rolling positions require individuals to have superb timing grasping ability. Although there are opportunities for rolling positions in the cryptocurrency market, opportunities are often rare. The rolling position strategy is suitable for extreme market conditions, especially extreme plunges.
In the 519 incident in 2021, the cryptocurrency market experienced an epic collapse. The well-known Internet celebrity Liang Xi became rich overnight because of his bold short selling. His short position started from $1,000 and he eventually earned $30 million through continuous rolling positions. On May 11, 2022, Luna, nicknamed "Moutai in the coin circle", experienced a collapse. In just one month, the price of Luna fell from $119 per coin to less than $0.0002, a 99.99% plunge. Many people lost all their money overnight, which is the perfect time to short Luna through rolling positions. Similarly, on November 9, 2022, FTX, the world's top cryptocurrency exchange founded by SBF, and hedge fund Alameda collapsed, and then the price of FTX's platform currency FTT plummeted by more than 90%, directly affecting the entire virtual currency market. Starting at 12:00 a.m. on November 9, the price of FTT fell from a high of $17.71 to $4.6 in less than 3 hours, a drop of 74%, which is also the best time to roll short FTT. In addition, in a bull market, the market conditions in the final stage of Bitcoin's highs are often rapid and fierce, which is the best time to roll long. In the fall back stage after the bull market's top high, it is an excellent time to roll short.
Many people may not be familiar with the concept of rolling positions, so I would like to emphasize it again. The definition of rolling positions is "small capital, high leverage, full-position trading, stop loss if the position is liquidated, and increase the position if there is profit". Usually 10x leverage is selected, and the position is liquidated when the price drops by 10%. The advantage of rolling positions is that in a one-way market, huge profits can be achieved as quickly as possible. After using rolling positions, there is no need to worry about price fluctuations, because the top of the bull market is unique and will eventually rise no matter how many corrections it experiences. However, rolling positions are extremely risky and are only effective in a one-way market. Small capital must be used, and even if there is a loss, it is not painful. The key is to seize the opportunity, and only a few people can succeed.The difficulty is that it takes courage and the right mentality to seize opportunities.
Why have we only recently started discussing the rolling strategy? Because it is only effective in a bull market. Liang Xi realized that it was the one-way market that made him successful, not the one-way market that destroyed him after he became rich overnight in the 519 incident. Times make heroes, and the same strategy varies greatly in different market conditions. When the wind comes, pigs can fly even if they stand at the wind. When the wind stops, understanding the core of the rolling strategy is the key. Let's continue to explore this topic.
In the cryptocurrency market, the rolling strategy requires special caution and a high degree of market insight. The volatility and uncertainty of the market make rolling operations full of risks, requiring investors to have a firm sense of risk control and good psychological quality. Successful rolling operations often require timely market analysis and decision-making in order to quickly adjust positions when the market changes.
In addition, the importance of risk management must also be considered during the implementation of the rolling strategy. Reasonable setting of stop-loss points and avoiding the use of excessive leverage are the key to ensuring the robustness of rolling operations. Due to the high volatility and extremeness of the cryptocurrency market, rolling operations may face greater risks, so investors need to have adequate preparation and countermeasures.
In actual operation, investors can combine technical analysis and fundamental analysis to assist in rolling decisions to improve the accuracy and success rate of operations. At the same time, it is also crucial to regularly evaluate and adjust the rolling strategy to adapt to market changes and changes in risks.
In general, the rolling strategy is a high-risk and high-return trading strategy that requires investors to have a deep understanding of the market and firm execution. When implementing the rolling strategy, be sure to be cautious, act within your means, avoid blindly following the trend and excessive risk-taking, so as to ensure the safety of funds and stable trading performance.
