Hello, crypto friends, I am TM Timo, a person who has been in the cryptocurrency world for many years.

Continuing to explain the important content of contract principles: rolling position

Definition of rolling position: In a trending market, after making significant profits using leverage, due to the passive decline of overall leverage, in order to achieve the effect of compound profit, increase the trend position at the right time. This process of increasing the position is called rolling position.

So what does 'the right time' mean? There are mainly two types:

  • Increase positions in a converging breakout market within a trend, quickly reduce the added positions after breaking through to catch the main rising wave.

  • Increase trend positions in pullback markets, such as buying the dip at moving averages

    As shown in the figure, when breaking through 1, you can add positions with low leverage, and at 2.3 it belongs to bottom-fishing position addition.

Rolling position sounds scary, but in other words, adding to a floating profit is much easier to understand. Saying it this way is much better; adding to a floating profit is just a common method in futures trading. You don't have to maintain a leverage of 5 to 10 times, just two to three times is sufficient, as long as the floating profit addition maintains a total position of two to three times.

Rolling position is like a nuclear bomb; you can't use it frequently.

Rolling positions are only suitable in three situations:

  • 1. Choose a direction after a long-term horizontal volatility new low

  • 2. Bottom-fishing after a significant drop in a bull market

  • 3. Breaking through significant resistance/support levels on a weekly chart; only in these three situations is the chance of success relatively high, and all other opportunities should be abandoned.

In a bear market, the win rate of rolling positions is lower due to the more erratic market conditions. That's all for today. For the newbies who want to learn trading, follow Timo for guidance and you won't lose your way; you can join the chat group on the homepage.