At three in the morning, he called, his voice trembling: "Brother Mao, I blew up again, I saw the right direction, just a four-point pullback, and I was wiped out."

I asked him how he was managing his position.
"Got the direction right, threw in 8,000 USD, 50x leverage."
I said, you saw the right direction, but you didn't leave yourself any room to survive.
Putting 8,000 USD full size into the market, a four-point pullback wipes it all out. The direction was correct, but what's the use?
There was silence on the other end of the line for a few seconds.
After a moment, he whispered, "So, how should I really play this?"
I didn't explain anything complicated, just drew him a set of rules.
Many people think that rolling positions means "adding on floating profits, going all-in, getting rich overnight."
They're terribly wrong. That kind of approach, one pullback and you're back to square one.
The real core of rolling positions is just three sentences:
Principal is always safe.
Add to your position only after breaking key levels.
Only the profits are rolled into the next position.
Taking a capital of 10,000 USD as an example.
Start with 500 USD, 100x leverage, so the position is 50,000 USD.
Set the stop-loss near the opening position; if wrong, only lose 500.
When that 500 USD earns 250 USD, take half of the profit to add to the position.
If the price drops below the previous low, add 70% of the remaining profit.
The entire principal of 10,000 USD never moved.
When the market crashes 30%, 10,000 USD becomes 48,000 USD.
The principal remains at 10,000 USD, and all profits are extracted from the market.
He took this method and ran it for half a month, then messaged me:
"Finally understand where I went wrong before. It’s not that I couldn’t see the right direction, but I was always gambling with my life."