Recently, I saw someone discussing rolling positions again, so I’ll share my understanding.

Rolling positions, to put it simply, involve small capital, high leverage, going all-in on the spot, stop-loss at liquidation, and increasing positions on unrealized gains. It sounds simple, but in practice, it tests courage, mentality, and market judgment. I’ve noticed many people have a big misunderstanding about rolling positions, thinking it’s just mindless adding to positions, but the core is about timing.

Looking back at several classic cases in the crypto world can help understand the power of rolling positions. The epic crash on May 19, 2021, saw a popular influencer boldly short, using 1,000 yuan to roll positions and turn it into 30 million, becoming overnight rich and famous. In May 2022, Luna, dubbed the Moutai of crypto, crashed from $119 to $0.0002, a 99.99% drop—this was the golden opportunity for shorting with rolling positions. In November of the same year, FTX exploded, with FTT’s price dropping from $17.71 to $4.6 in less than three hours, a 74% decline—another perfect rolling short opportunity.

But here’s a key point: rolling positions are only suitable for one-sided markets. The crypto market’s declines are fast and fierce; falling markets are more suitable for rolling short positions. The final surge in a bull market is also a good time for long rolling positions, while the pullback at the top is the best time for shorting. You could say there are many opportunities for rolling, but they are rare and hard to catch.

If you want to try rolling positions, my advice is to start with small capital, ideally no more than 10% of your principal. Using 10x leverage is reasonable; a 10% drop will wipe out your position. It’s only suitable for large-cap assets like Bitcoin and Ethereum; altcoins are too risky. In a smooth one-sided rally of 50%, theoretically, the maximum profit from rolling could reach 100 times, which is why some say rolling is the fastest way to get rich.

But I must say, rolling positions look simple, but in reality, it’s a game of life and death. The influencer who got rich overnight was eventually destroyed by rolling positions because he didn’t understand that his success wasn’t due to rolling itself, but because of the one-sided market. When the wind comes, pigs standing at the windward side will fly; when the wind stops, those flying pigs will fall.

In practice, most traders use full-margin contracts, and unrealized gains can be used as collateral to add to positions. When there’s significant profit, you can withdraw the principal first, and when profits grow larger later, withdraw some funds again. My friendly advice is that even if you judge the market well, don’t overuse rolling; at most, do it 2-3 times and take profits when it looks good. We often hear about adding on unrealized gains, followed by a phrase about losing everything—this is because many treat rolling as mindless operation.

The difficulty of rolling positions lies in market judgment and the courage and mentality to seize opportunities when they come. Most players will quickly lose everything if they don’t handle it well, but if you can grasp that narrow window of life and death, you can realize the dream of 100x returns. So if you want to learn, try with 100 yuan; if you master it, it will benefit you for life, and if you don’t, you won’t lose much. But remember, the prerequisite for successful rolling is always a one-sided market; without this, everything is pointless.