Rolling over positions has been all the rage lately, and the stories are always the same: use a small amount of capital and several times leverage to ride a big trend, roll it over a few times
and turn it into dozens of times your starting capital. Today, let’s talk about what those stories leave out.
【What Rolling Over Positions Involves】Instead of cashing out unrealized gains, you use them as risk capital for a new position and keep opening trades,
It’s essentially using the market’s money to leverage up. As long as the trend continues, compounding can be incredible; once it stops, those unrealized gains
can go from a few dozen points to zero in just one or two big down candles.
【The Mathematical Truth】The essence of rolling over positions is “getting consecutive bets right.” If your win rate is 60%, the odds of winning four times in a row
are only 13%. Behind every post about doubling your money overnight are 99 people who’ve already deleted their accounts.
Survivorship bias is the most expensive thing in this industry.
【If you insist on trying】1. Only use money you can afford to lose completely without losing sleep; 2. Keep rolling over your unrealized gains
until they reach a certain multiple, then force yourself to withdraw your principal and keep rolling with “the market’s money”; 3. Write a zero-balance contingency plan in advance.
Rolling your position is a firework, not a way to make a living. Don’t set off fireworks with money you need to live on.
What do you think? Share your experiences in the comments.