The rolling warehouse operation, everyone should have heard of it~
A simpler explanation of rolling warehouse is: the bold get rich, while the timid starve.
Rolling warehouse method: In 2018, what I know is that it's just one wave of market, two people became rich using this method~ It's really just one wave of market that leads to wealth, but more often it results in losses.
It's easy to talk about rolling warehouse; many futures traders like to casually mention it without looking at the market, whether to roll or not depends on their mood... In 2018, the two better rolling warehouse opportunities were in April EOS and the subsequent BCH surge.
If rolling warehouse fails once, it's over... No matter how much you earned before, just one failure means it's over, and the key is that rolling warehouse will keep placing you in a disadvantageous position over and over again.
The difficulty lies in judging the big market. I've said so much trivial stuff, so let me detail the use of the rolling warehouse method and the judgment.
The literal meaning of rolling warehouse is to continuously roll your position. For example, when EOS is at $2, we judge that a big market is coming, and we think EOS will reach 1000 RMB!!!!
So I choose to go long on EOS at $2, assuming I use 100 EOS. With 20x leverage. When EOS reaches $2.1, I already have 200 EOS, at which point I choose to close my position. Then I use 200 EOS to go long at $2.1. When EOS is at about $2.205, I have 400 EOS... Just keep rolling this way~ No joke, if EOS doesn't reach 1000, and EOS is at 150, how much do you think that would be? Scary, right? This is just with an initial capital of 100 EOS.
For ordinary futures, when EOS reaches $2.205, you have about 300 EOS. That already creates a gap of 100 EOS, and we only rolled the warehouse once. Everyone knows how high this compound interest can be.
Of course, it comes with enormous risks!!!! If: we open long on EOS at $2 with 100 EOS, constantly rolling warehouse. When EOS reaches 150 RMB each!!! While we are fantasizing about a bright future. We hold countless EOS and choose to go long again at 150, after all, EOS is supposed to reach 1000 each in 2018. Suddenly: the momentum is lost~ the star aura disappears~ it crashes, in a bull market, your mind is filled with fantasies, if you're not careful... it's over... All the success falls apart.
For ordinary futures: at this point, opening from $2, even if it pulls back, but when it reaches 150 and starts to drop, there is still a huge room and time for profit-taking!!! And there are still quite a few, just less than rolling warehouse!
This is how rolling warehouse works; one mistake and you're doomed~ Of course, you might say, what if I judge the market correctly? This kind of market only appears in extreme conditions, meaning bull markets, or single currency flying~ Don’t try to convince me, continuously falling, how about shorting rolling warehouse? Let me reiterate my point, continuously falling, for me, is neither a bear market nor a bull market! It just doesn't belong to the bull market of the novices.
Single currency flying~ I witnessed a novice making money during that BCH wave... He really knew nothing, he just simply asked me about rolling warehouse operations, and anyway, he opened with a negative of over 40%, without caring or looking... In the end, just like that, he rolled from 50,000 RMB to nearly 3 million, in just a week... during that BCH surge.
Are you saying their market judgment is impressive? No, they don't understand anything, don’t look at the candlesticks, just mindlessly roll warehouse... They roll until they see a lot of money and then withdraw to spend, only then do they close positions... Do you think anyone can always judge the market correctly? Isn’t there a chance of making a mistake along the way? I don’t believe that... There will always be times when mistakes happen.
So: Friendly advice: When judging that the market is good, use rolling warehouse sparingly, roll it 2 or 3 times, and take profits when you can.. If commodity futures are likened to the spot market of digital currency, the risks are quite similar. Therefore, digital currency futures are greater than digital currency spot! The risks of rolling warehouse futures are far greater than those of digital currency futures.
You should know: Ordinary people think stocks are high-risk, your rolling warehouse operation > digital currency futures > digital currency spot = commodity futures > stocks.
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