If you plan to invest in the cryptocurrency world, you must take a few minutes to read my answer word for word, as it may save your life and a family.
Thousands of originally happy families ended up broken and ruined, stemming from the pursuit of an unattainable dream of making a fortune in the cryptocurrency world.
I think if I really want to continue down the path of trading, I still need to study diligently. In addition to understanding the basics, I should also analyze news and research technical indicators.
If you do not conduct in-depth research and reasonably plan your finances, your funds will only be depleted. In the end, as a baseless retail investor, you will only joyfully enter and then leave in disappointment.
Some well-known technical indicators have lasted through time for a reason. For example, the divergence signal of MACD, the overbought and oversold signals of KDJ, support and resistance signals, etc. While they cannot guarantee profits, they allow you to conduct quantitative analysis based on a mature model, giving investors a basic direction.
In the cryptocurrency circle, going from a few thousand to 1 million capital has only one path: rolling positions.
Once you have 1,000,000 capital, you will find that your whole life seems different. Even if you don’t use leverage, a 20% rise in spot will yield 200,000, which is already the income ceiling for most people in a year.
And when you can go from tens of thousands to 100,000, you will grasp some thoughts and logic for making big money. At this point, your mindset will also be much calmer; going forward, it’s just copying and pasting.
Don’t always talk about millions and billions; start from your actual situation. Blowing your own horn only makes you feel good. Trading requires the ability to identify the size of opportunities; you cannot always play with small positions or heavy positions. Usually, just play with small positions; when big opportunities come, bring out the big guns.
For example, rolling positions is an operation that can only be conducted when there is a big opportunity; you cannot roll all the time. Missing an opportunity is okay because you only need to roll successfully three or four times in your life to go from 0 to tens of millions; tens of millions are enough for an ordinary person to ascend to the ranks of the wealthy.
First, we need to know in what circumstances rolling positions are suitable:
Currently, only the following three situations are suitable for rolling positions:
1► Choosing a direction after long-term horizontal volatility reaches a new low
2► Buy the dip after a significant drop in a bull market.
3► Break through significant resistance/support levels at the weekly level.
Overall, only the above three situations have a greater chance of winning; all other opportunities should be abandoned.
Common view:
Define rolling positions: in trending markets, after leveraging significantly profits, due to overall leverage passively decreasing, to achieve compound profit effects, increase trend positions at the appropriate time. This process of increasing positions is called rolling.
The following are methods for manipulating rolling positions:
Adding to floating profits: after obtaining floating profits, consider adding to buy positions. However, before adding, ensure that the holding cost has been lowered to reduce the risk of losses. This does not mean blindly adding after making profits, but rather to do so at the right time.
Base position + T-trading rolling operation: divide capital into several parts, leaving a portion of the base position untouched, while the other part conducts high sell low buy operations. The specific ratio can be chosen according to personal risk preference and capital scale. For example, you can choose half position rolling T, 30% base position rolling T, or 70% base position rolling T, etc. This operation can reduce holding costs and increase profits.
In my opinion, there are mainly two types of 'appropriate timing' defined:
1. Increase positions in convergence breakout trends during trends, and quickly reduce the added position after the breakout to catch the main rising wave.
2. Increase trend positions during pullback trends, such as buying in batches when the moving average pulls back.
There are various specific operational methods for rolling positions; the most common is to achieve it through position adjustments. Traders can gradually reduce or increase the number of positions based on market changes to achieve profit. Traders can also amplify profits through trading tools like leverage, but this will also increase risks.
A few points to pay attention to when rolling positions:
1. Enough patience, the profits from rolling positions are immense, as long as you can roll successfully a few times, you can earn at least tens of millions, so you cannot roll easily; you must find high certainty, very reliable opportunities;
2. What is a very reliable opportunity? It’s that kind of situation where the price drops sharply, then starts to consolidate, and suddenly shoots up. At this time, the trend is very likely to reverse, and you must quickly get in; don’t miss the good opportunity. 10%-100% version
1⃣ Only 10% of people in this market can make money because it is destined to be a zero-sum game;
2⃣ The money you can make will only occur during 20% of bull market time; the rest of the time will eliminate those without investment logic and patience.
3⃣ Always maintain a mindset that can withstand a 30%-50% pullback to laugh till the end; otherwise, the process will be a torment for you;
4⃣ 40% of retail investors may stop right at the beginning; the pitfalls in this circle are more than you think;
5⃣ At least 50% of people in this market will choose to play contracts, most will ultimately gain nothing and lose everything; remember, contracts are gambling;
6⃣ In a bull market trend, 60% of people playing spot can earn to some extent; being able to hold steady throughout the bull market cycle is the ultimate winner;
7⃣ It is expected that 70% of people are continuously adding funds without ever taking out money; the cryptocurrency circle is far more brutal than you imagine;
8⃣ 80% of people become addicted to the wealth effect of this circle and cannot return to the past, just like being addicted to drugs;
9⃣ 90% of people are just passersby in this market, but everyone thinks they are the chosen ones;
In the end, #BTC will definitely reach 1,000,000 USD, always believe this.
3. Only roll long positions;
4. Setting appropriate stop-loss and take-profit points is very important.
Rolling short is a high-risk strategy; market fluctuations can lead to huge losses. When entering trades, we should set a reasonable stop-loss point; once the market trend goes against expectations, timely stop-loss to control losses. It is equally important to set appropriate take-profit points to protect profits. This ensures we gain sufficient profits before market reversals.
5. Reasonable capital management is also the key to stable profits.
When engaging in rolling short operations, we should allocate funds reasonably and not invest all funds into one trade. Diversified investment can reduce risks and improve overall stability. We should also follow risk control principles and not abuse leverage to avoid greater losses.
6. Timely tracking of market dynamics is also the key to profitability.
Market conditions are constantly changing; we should maintain sensitivity to the market and adjust strategies in a timely manner. Timely understanding and learning relevant technical indicators and trading tools can help us better analyze market trends and improve prediction accuracy.
Rolling short in the cryptocurrency market can be a strategy to make profits, but it requires cautious operation. By accurately predicting market trends, setting appropriate stop-loss and take-profit points, reasonable capital management, and timely tracking of market dynamics, we can steadily earn profits in the market.
Of course, if it is a cryptocurrency like Eth, you can also try forced rolling positions for staking, lending, or investing in liquidity pools to obtain safer returns, and specific currencies should be analyzed individually to avoid liquidity issues.
Rolling position risks
Let’s talk about rolling strategies; many people think this is risky, but I can tell you, the risk is very low, far lower than the logic of futures trading.
If you only have 50K, how to start with 50K? First, this 50K should be your profit; if you are still losing, then don’t look.
If you open a position at Bitcoin 10,000, set leverage at 10 times, and use isolated margin mode, only opening 10% of the position, that is equivalent to 1x leverage, with a 2% stop-loss; if you stop-loss, you only lose 2%, just 2%? 1,000 bucks. How do those who get liquidated get liquidated? Even if you get liquidated, fine, isn't it just a loss of 5K? How can you lose everything?
If you are correct, and Bitcoin rises to 11,000, you continue to open 10% of your total capital, also setting a 2% stop-loss. If you stop-loss, you still earn 8%. What about the risk? Isn’t the risk very high? And so on...
If Bitcoin rises to 15,000, and you add positions smoothly, this wave’s 50% market should earn you about 200,000. Catching two such markets means about 1,000,000.
There is no such thing as compound interest; 100 times profit comes from two 10 times, three 5 times, four 3 times, not from daily or monthly 10% or 20% compound interest; that’s nonsense.
This content not only has operational logic but also contains the core internal skills of trading, position management; as long as you understand position management, you will never lose everything.
This is just an example; the general idea is like this, specific details still need to be pondered by yourself.
The concept of rolling positions itself does not have risks; it not only has no risks but is also one of the correct thoughts for futures trading. The risk is leverage. 10x leverage can roll; 1x can also work. Generally, I use 2-3x leverage. Catching twice is the same as having several dozen times the yield, right? At worst, you could use 0.x leverage. What does this have to do with rolling? This is clearly your own choice regarding leverage; I have never said to use high leverage to operate.
Moreover, I have always emphasized that in the cryptocurrency circle, only invest one-fifth of your money, and only invest one-tenth of your spot money to play futures. At this time, the futures capital only accounts for 2% of your total capital, and futures should only use 2-3x leverage, and only play Bitcoin, which can be said to reduce the risk to an extremely low level.
If 2,000,000 is gone, will you hurt?
Always using high leverage is pointless. Many people say that rolling positions are risky, that making money is just good luck; saying these is not to convince you, persuading others is meaningless. I just hope that people with the same trading philosophy can play together.
But currently, there is no screening mechanism; there will always be harsh voices that interfere with the recognition of those who want to watch.
Capital management
Trading is not filled with risks; risks can be mitigated with capital management, for example, I have a futures account of 200K, and a spot account ranging from 300K to 1M randomly; when the opportunity is large, invest more, when there is less opportunity, invest less.
With good luck, you can earn more than 10 million RMB in a year, that’s already plenty. With bad luck, the worst-case scenario is that the futures account gets liquidated; it doesn’t matter, the profits from spot can compensate for the losses from futures liquidation. After compensating, you can rush in again. Is it really possible that spot doesn’t earn a single cent in a year? I’m not that inexperienced.
You can not make money but cannot lose money, so I have not been liquidated for a long time. Moreover, I often make profits from futures and withdraw one-fourth or one-fifth separately; even if liquidated, some profits will remain.
As an ordinary person, my personal advice is to use one-tenth of the position of spot to play futures, for example, with 300K, use 30K to play; once exposed, invest the profits into spot. After you have been liquidated ten or eight times, you can always grasp some internal insights; if you still haven’t grasped it, then don’t play, as it’s not suitable for this industry.
▼ How small funds can grow large
Many people have many misconceptions about trading, such as small funds should do short-term to roll up capital; this is completely a misconception. This kind of thinking is entirely trying to exchange time for space, attempting to get rich overnight. Small funds should do medium to long-term to grow large.
Is one piece of paper thin enough? When a piece of paper is folded 27 times, it is 13 kilometers thick. If folded another 10 times to 37 folds, it would be thicker than the Earth. If folded 105 times, the entire universe would not be able to contain it.
If you have 30K capital, you should think about how to triple it in one wave, and then triple it again in the next wave... this way you will have four to five hundred thousand. Instead of thinking about making 10% today and 20% tomorrow... this will eventually lead to your downfall.
I believe many friends in the community have experienced the helpless feeling of being caught after investing all in, while the market rises but it has nothing to do with them; cutting losses but unable to do so, these can be avoided through position management.
No more nonsense, let’s get straight to the point:
Position management advice for everyone now:
For example, you take out 30,000 U to do contracts.
So my suggestion is to divide it into three parts, each part 10,000 U.
Each time you open a position, use one portion to open a position, a fixed 10,000 U.
Bitcoin no more than 10 times, altcoins no more than 5 times.
If you lose money
For example, if you lose 1,000 U, you can replenish 1,000 U from outside.
If you make 1000U, you take 1000U out.
Make sure to say a recent period of time
You can ensure that each time you open a position, it is a fixed position of 10,000 U.
Until you earn 60,000 U using this method from 30,000 U
Raise each of your positions to 20,000 U
Doing it this way has benefits:
First point, split positions + low leverage to avoid being pinched by the exchange, which could cause you to lose all your funds.
Second point, avoid falling into issues like this. One day you get too emotional and lose everything; at most, you could lose 1/3; the remaining can give you a buffer opportunity.
Third point, maintain a fixed position. You can maintain a relatively calm mindset both when losing and winning, which can help stabilize your mindset.
My habit when opening positions is to fill them all at once.
For example, one portion is 10,000 U; during one market, one coin equals a full position opened.
Filling is 1/3 of the split capital; altcoins 5 times, Bitcoin 10 times, so fully entering and exiting.
The way I get in is that overall, I have a relatively refined and accurate grasp of entry points.
If you always use stop-loss and low leverage, it is impossible to get liquidated.
My logic is to not look at all indicators, just focus on position profits and losses.
For example, if my total scale earns X%, I add one position; if the total scale loses Y%, I will stop-loss or exit entirely.
All operations are only related to my position’s profits and losses; the K-line only serves as the initial direction for opening positions.
As for those indicators, their original purpose is to feedback the position’s profit and loss situations.
In fact, this operation of mine is essentially an abstract indicator, specifically used by the ancestor Li Fomor; I do not tell ordinary people.
The secret has been given to you all; whether you can become famous in the world depends on yourself.
Everyone must collect these methods and read them several times. Friends who find them useful can pass them on to more people who trade coins around them. Follow me to learn more about cryptocurrency insights. After being rained on, I wish to hold an umbrella for retail investors! Follow me, and together we will move forward on the cryptocurrency path!
