“Rolling positions” has been all the rage lately, and the stories are always the same: use a small amount of capital with several times leverage to ride a major trend, then roll it over a few times
and turn it into dozens of times the original amount. Today, let’s talk about what they don’t tell you.
【What Rolling Positions Involves】Instead of cashing out unrealized gains, you use them as risk capital for new positions and keep opening trades.
It’s like using the market’s money to lever up. As long as the trend continues, the compounding is astonishing; once it stops, those unrealized gains
can go from a few dozen points to zero in just one or two big bearish candles.
【The Math】The essence of rolling positions is “getting it right repeatedly.” If each trade has a 60% win rate, the probability of winning four times in a row
is only 13%. Behind every post you see about doubling your money overnight are 99 people who have already deleted their accounts.
Survivorship bias is the most expensive thing in this industry.
【If you absolutely must try】1. Only use money you can afford to lose completely; 2. Let your unrealized profits compound
until they reach a certain multiple, then force yourself to withdraw your principal and keep compounding with “the market’s money”; 3. Write a plan in advance for when it all goes to zero
Rolling your position is fireworks, not a way to make a living. Don’t use your living money to set off fireworks.
What do you think? Share your experiences in the comments.