Hello everyone, I am Jiang Nan, a person who works hard to live and explore Web3 every day.
Since the Fed cut interest rates, many newcomers have flocked to the cryptocurrency industry. The cryptocurrency industry is a place where only the fittest survive. The threshold is low, and everyone can enter the cryptocurrency industry, but not everyone can make money in the cryptocurrency industry. If you plan to enter the cryptocurrency industry, please remember that the cryptocurrency industry is not a place where you can get rich overnight, but a field that requires long-term accumulation and continuous learning.
Many people come to the cryptocurrency circle with the dream of getting rich overnight, and they fantasize about making 1 million yuan from a few thousand yuan. Of course, it is not that no one has succeeded, but in most cases it can only be achieved through "rolling positions". Although rolling positions is a theoretically feasible way, it is by no means an easy road.
Rolling is a strategy that is only used when big opportunities arise. It does not require frequent operations. If you seize a few such opportunities in your life, you can accumulate tens of millions from zero. And tens of millions of assets are enough for an ordinary person to join the ranks of the rich and achieve financial freedom.
When you really want to make money, don't think about how much money you want to make, how to make so much, and don't think about those tens of millions or even hundreds of millions of goals, but start from your actual situation and take more time to settle down. Boasting blindly cannot bring us substantial changes. The key to trading is to identify the size of opportunities. You can't always have a light position or a heavy position. You can practice with a small amount of money at ordinary times, and when the real big opportunity comes, go all out. When you really make 1 million yuan from a principal of tens of thousands of yuan, you have unknowingly learned some ideas and logic for making big money. At this time, your mentality will become more stable, and future operations will be more like a repetition of previous successes.
If you want to learn how to roll over, or if you want to learn how to make millions from a few thousand, then you should read the following content carefully.
1. Determine the timing of rolling positions
Rolling a position is not something you can do whenever you want. It requires certain background and conditions to have a greater chance of success. The following four situations are most suitable for rolling a position:
(I) Breakthrough after a long period of sideways trading: When the market is in a sideways state for a long time and the volatility drops to a new low, once the market chooses a breakthrough direction, you can consider using rolling positions.
(ii) Buying at the bottom during a big drop in a bull market: In a bull market, if the market experiences a round of sharp rise and then suddenly falls sharply, you can consider using rolling operations to buy at the bottom.
(III) Weekly level breakthrough: When the market breaks through a major weekly resistance or support level, you can consider using rolling positions to capture the breakthrough opportunity.
(iv) Market sentiment and news events: When market sentiment is generally optimistic or pessimistic, and there are major news events or policy changes that may affect the market in the near future, you can consider using rolling operations.
Only in the above four situations will the chances of success of rolling positions be relatively high. At other times, you should be cautious or give up the opportunity. However, if the market seems suitable for rolling positions, you also need to strictly control risks and set stop loss points to prevent potential losses.
2. Technical Analysis
After you confirm that the market has met the conditions for rolling positions, the next step is to conduct technical analysis. First, you need to confirm the trend and use technical indicators to determine the direction, such as moving averages, MACD, RSI, etc. If possible, combine multiple technical indicators to jointly confirm the trend direction. After all, it is always right to make more preparations. Secondly, you need to identify key support and resistance levels to determine the effectiveness of the breakthrough. Finally, use divergence signals to capture reversal opportunities. (Divergence signal: When the price of a certain currency hits a new high, MACD does not hit a new high, forming a top divergence, indicating that the price will rebound, you can reduce your position or go short; similarly, when the price hits a new low, MACD does not hit a new low, forming a bottom divergence, indicating that the price will rebound, you can add positions or go long.)
3. Position Management
After this step is done, the next step is position management. Reasonable position management includes three key steps: determining the initial position, setting the position increase rules and formulating the position reduction strategy. Let me give you an example to help you understand the specific operations of these three steps:
Initial position: If my total capital is 1 million yuan, then the initial position should not exceed 10%, that is, 100,000 yuan.
Rules for adding positions: You must wait until the price breaks through the key resistance level before adding positions. Each increase in position should not exceed 50% of the original position, that is, a maximum of 50,000 yuan can be added.
Reduced position strategy: When the price reaches the expected profit target, gradually reduce the position, and don't hesitate when it's time to let go. Each reduction should not exceed 30% of the existing position to gradually lock in profits.
In fact, as ordinary people, we should charge more when the opportunities are great, and charge less when the opportunities are few. If we are lucky, we can earn millions, and if we are unlucky, we can only accept the loss. But I still want to remind you that when you make money, you should withdraw the invested capital, and then use the earned part to play. You can not make money but you cannot lose money.
4. Adjusting Positions
After completing position management, the most critical step is how to implement rolling operations through position adjustments.
The operation steps are undoubtedly those steps:
1. Choose the right time: enter the market when the market meets the conditions for rolling positions.
2. Open a position: Open a position based on technical analysis signals and choose a suitable entry point.
3. Add positions: Gradually add positions as the market continues to develop in a favorable direction.
4. Reduce positions: Gradually reduce positions when the predetermined profit target is reached or the market shows reverse signals.
5. Close the position: When the profit target is reached or the market shows a clear reversal signal, the position is completely closed.
Here I share with you my specific operation of rolling warehouse:
(I) Adding to positions with floating profits: When the investment assets appreciate in value, you can consider adding to your positions, but the premise is to ensure that the cost of holding the position has been reduced, thereby reducing the risk of loss. This does not mean that you should add to your positions every time you make money, but you should do it at the right time, such as adding to your positions in a convergence breakthrough market in the trend, and then quickly reducing them after the breakthrough, or adding to your positions when the trend is corrected.
(II) Base position + T: Divide the assets into two parts, one part remains unchanged as the base position, and the other part is used to buy and sell when the market price fluctuates to reduce costs and increase profits. The proportions can refer to the following three types:
1. Half-position rolling: half of the funds are used for long-term holding, and the other half is used for buying and selling when prices fluctuate.
2. 30% base position: 30% of the funds are held for the long term, and the remaining 70% are used to buy and sell when prices fluctuate.
3. 70% bottom position: 70% of the funds are held for the long term, and the remaining 30% is used to buy and sell when prices fluctuate.
The purpose of doing this is to optimize the holding cost while maintaining a certain position and taking advantage of short-term market fluctuations.
When you reach this step, you have actually completed most of the process. The picture above shows my holdings. For details, please refer to the article I wrote yesterday: Exclusive Reveal | My Cryptocurrency Holdings Revealed
V. Risk Management
Risk management mainly consists of two parts: total position control and fund allocation. Make sure that the overall position does not exceed the tolerable risk range, allocate funds reasonably, and do not invest all funds in a single operation. Of course, real-time monitoring is also required, and market dynamics and technical indicators should be closely followed. Flexible adjustments should be made according to market changes, and stop losses or adjust positions in a timely manner when necessary.
Many people are afraid and eager to try when they hear about rolling positions. They want to try but are afraid of the high risk. In fact, the risk of rolling positions itself is not high. The risk is leverage, but the risk is not great if leverage is used properly.
Just like if I have 10,000 yuan in principal and open a position when a certain coin is 1,000 yuan, I use 10x leverage and only use 10% of the total funds (that is, 1,000 yuan) as margin, which is actually equivalent to 1x leverage. Set a 2% stop loss. If the stop loss is triggered, I will only lose 2% of the 1,000 yuan, that is, 200 yuan. Even if the liquidation condition is eventually triggered, you will only lose the 1,000 yuan, not all the funds. Those who have liquidated their positions often use higher leverage or larger positions, which may trigger liquidation with a slight market fluctuation. But according to this method, even if the market is unfavorable, your losses are limited. So 20 times can be rolled, 30 times can be rolled, then 3 times can also be rolled, and at worst 0.5 times can also be used. Any number of times of leverage is fine, the key is to use and control the position reasonably.
The above is the basic process of using rolling positions. Friends who want to learn can read it several times and think carefully. Of course, there will be different opinions, but I only share my experience and do not convince others.
So how can we make small funds bigger?
Here we have to mention the compound interest effect. Imagine if you have a coin and its value doubles every day, then after a month, its value will become extremely amazing. The value doubles on the first day, doubles again on the second day, and so on, and the final result will be an astronomical figure. This is the power of the compound interest effect. Even if it is just a small amount of money at the beginning, after a long period of continuous doubling, it can also increase to tens of millions.
For those who want to enter the market with a small amount of capital, I suggest that you focus on big goals. Many people think that small capital should frequently make short-term transactions to achieve rapid appreciation, but it is actually more suitable for medium and long-term investment. Compared with making small profits every day, you should focus on how many times the growth you can achieve with each transaction, and the unit should be times, exponential growth.
As for the position, you must first know how to diversify the risk and not concentrate all the funds on one transaction. You can divide the funds into three or four parts, and only use one part for trading each time. If you have 40,000 yuan, divide it into 4 parts, and use 10,000 yuan for trading. Secondly, you should use leverage appropriately. My personal suggestion is that you should not use more than 10 times for big cakes and two cakes, and not more than 4 times for cottages. In addition, you should make dynamic adjustments. If you lose, you should supplement the same amount of funds from the outside. If you make money, you should withdraw it appropriately. Don't let yourself lose money anyway. Finally, you should increase your position. Of course, the premise of this is that you have already made a profit. When your funds grow to a certain level, you can slowly increase the amount of each transaction, but don't add too much at one time. You should make a gradual transition.
I believe that through reasonable position management and a sound trading strategy, small funds can also gradually realize substantial appreciation. The key is to patiently wait for the right time and focus on the big goal of each transaction, rather than the small daily profits. Of course, I have also been liquidated, but I still have spot income to make up for my losses. I don’t believe that you didn’t make a penny from the spot on hand. My futures only account for 2% of the total funds. No matter how much I lose, I will not lose it all, and the amount of loss has always been within my control. Finally, I hope that each of us can make a fortune and make hundreds of millions.
