Rules are more reliable than intuition, and profits are safer than the principal.
I have seen too many contract players treating the trading interface like a casino:
If the direction is right, a 10% increase is hard to hold; after closing early, they watch helplessly as the market soars. If the direction is wrong, a 10% loss leads to stubbornly holding on, continuously averaging down until a sharp drop brings them to zero. The most unfair part is that even when their judgment is correct, they get shaken out by a 5% normal pullback, selling at the bottom price.
What kind of transaction is this? It's simply giving money to the market.
In my years of dealing with cryptocurrencies, I have come to realize one truth: the only difference between experts and novices is that experts treat profits as bullets and the principal as their life. Today, I want to share the 'inverted pyramid rolling method.' Memorize these three iron rules; they can save your life at critical moments.
First, the principal must not be moved; only profits can be the 'suicide squad'
The recent scenes of continuous crashes in the cryptocurrency market are still fresh in memory: on October 11, Bitcoin plummeted 13% in a single day, leading to over 1.6 million investors being liquidated; on December 1, Bitcoin crashed again, with over 190,000 people being liquidated. Behind these painful cases, there is a common point—over-leverage.
Many people do not understand that leverage itself is a double-edged sword. Under 10x leverage, a 10% reverse fluctuation in price can lead to a total loss of margin. What’s even scarier is that when the market fluctuates violently, the 'spike' phenomenon may instantaneously break through your forced liquidation line, leaving no time to react.
My strategy is very simple: the principal never participates in risks; additional positions only wait for key positions to be confirmed, and only profits are used to seek greater returns.
Two, practical application of inverted pyramid rolling positions: taking an account of 10,000U as an example
Assuming I judge that the market will see a drop of 30%, here are my specific operational steps:
① Testing phase—light positions for trial
First invest 500U (5% of the principal), use a higher leverage, and set the stop loss 2% above the opening price. Be patient and observe if it does not reach the preset position; do not operate randomly.
This 500U is like a scout sent out, its task is to probe the market's reality, rather than to fight to the death.
② First additional position—profit splitting
When the floating profit reaches 50% (i.e., 250U), half of the profit (125U) will be added to the position. At this point, the original position is still there, but the size of the new position is relatively light, and the risk has actually been reduced.
③ Acceleration phase—reinvesting profits
When the price breaks through the previous low again, continue to invest 70% of the remaining profit. By this point, all my funds in the market come from profits, and the principal remains safely outside the account.
④ Hedging protection—locking in profits
When the floating profit exceeds the principal, immediately open a reverse hedging position, which is equivalent to putting a 'bit' on the market. This step is often overlooked by many, yet it is key to continuous profitability.
⑤ Closing phase—ghost position
When the market enters the 'doomsday acceleration' phase, I will use what is called a 'ghost position' (very light position) to chase the last segment of the market, just like biting down on the last piece of fat.
Following this process through a 30% decline, the final account settlement is 48,000U, with 10,000U of principal intact, and 38,000U all being market rewards.
Three, why can this method allow you to live longer?
The brilliance of this operation method lies in that it adheres to the core principle of Jesse Livermore's 'inverted pyramid adding method': gradually increasing the position after confirming the trend, rather than entering with a heavy position all at once.
Compared with traditional 'all-in' trading, the inverted pyramid rolling position has three major advantages:
1. Risk decreases step by step
The initial position is very light, and even if the judgment is wrong, the losses are limited. As the trend is confirmed, although the position increases, since profits are used, the actual risk is decreasing.
2. Less psychological pressure
Because the principal is already safe, you are using the market's money to earn more money, which leads to a calmer mindset, and your decisions will not be influenced by fear.
3. Avoid chain liquidations
During market crashes, highly leveraged bulls face forced liquidation, leading to a vicious cycle of 'decline—liquidation—further decline.' The inverted pyramid rolling position method uses initial leverage cautiously and is not easily washed out by short-term fluctuations.
Four, the cruel reality of the cryptocurrency market
It must be admitted that the current structure of the cryptocurrency market is extremely fragile. After Bitcoin reached a historic high of 126,300 USD in early October, it has since accumulated a drop of over 31%, with all gains for the year having been given back.
On one hand, the marginal tightening of macro liquidity is a core driver. The postponement of the Federal Reserve's interest rate cut expectations has led to a marginal contraction in USD liquidity, with high-volatility assets being the first to be affected. On the other hand, there are structural problems in the market itself, with insufficient buying support. In the absence of new funds entering the market, once the price breaks through key levels, it swiftly triggers a chain reaction of forced liquidation among highly leveraged bulls.
What’s even more worrying is that some exchanges offer leverage as high as 125 times, meaning that a 1% price fluctuation could double or wipe out account equity. How crazy is that!
Five, what should we do next?
For ordinary investors, I would like to offer the following advice:
1. Leverage is not a bad thing, but it must be used in the right place
High leverage trading should be viewed as a hedging tool for professional institutions, rather than a means of personal speculation. For ordinary investors, the leverage ratio should be controlled within a bearable range.
2. Recognize the domestic policy red line
It must be clearly recognized that activities related to virtual currency are considered illegal financial activities. Participating in virtual currency trading faces extremely high policy and legal risks.
3. Always protect the bottom line of the principal
My personal iron rule is: the risk of any single trade should not exceed 2% of the total capital. This way, even if there are multiple consecutive failures, you will not be eliminated by the market.
The market specializes in treating various disobediences but will reward those who follow the rules. Whenever you are about to open a position, first ask yourself a simple question: In this trade, are you losing profits or your life?
If you can't understand this, next time there is a crash, you might become one of the statistics of liquidations. Those who can rationally answer this question have already won half of this survival game.
Remember, the market has opportunities every day, but the bullets are limited. Surviving is more important than anything else. Follow Xiang Ge to gain more first-hand information and precise points in the cryptocurrency world; becoming your guide in the crypto space. Learning is your greatest wealth!#加密市场反弹 #美联储重启降息步伐 $ETH
