An elder used two years, starting with less than 700,000, to achieve a return of 418134.86%, turning it into over 28 million.
Today, I’m going to share the best practical advice with everyone:
The method of position management is batch operation.
Batching: There are two types: equal batching and unequal batching.
First: Equal distribution, also known as rectangle trading method, refers to dividing funds into several equal parts and buying or selling sequentially, with the same proportion of funds for each transaction. Typically, 3 or 4 equal parts are used. For example, first buy 30%, if profit is made, buy another 30%; if no profit, temporarily refrain from further investment. When the price of the cryptocurrency reaches a certain peak or the market changes, sell in batches.
Second: Unequal distribution, refers to investing or selling funds in different proportions, such as 1:3:5, 1:2:3:4, 3:2:3, etc. The forms generated by different ratios include: diamond, rectangle, hourglass, etc., with pyramid trading method being the most common.
Third: Using equal funds and equal positions, compare different methods.
Pyramid: Buy 5 layers at 1000, 3 layers at 1100, 1 layer at 1200, average price 1055
Inverted Pyramid: Buy 1 layer at 1000, 3 layers at 1100, 5 layers at 1200, average price 1144
Equal Rectangle: Buy 3 layers at 1000, 3 layers at 1100, 3 layers at 1200, average price 1100
Price rises to 1200 with profits: Pyramid 145, Inverted Pyramid 56, Rectangle 100
Price drops to 1000 with losses: Pyramid +55, Inverted Pyramid -144, Rectangle -100
For example: When a cryptocurrency drops to 10 yuan, buy a 20% position. If the price drops to 8 yuan, then enter another 30%. At this point, the average cost is 8.6 yuan. If the market continues to drop to 5 yuan, enter another 40%, bringing the average down to 6.5 yuan. If the price rebounds to 6.5 yuan, you break even. If it rebounds to 10 yuan, you make a profit of 3.5 yuan. But if you buy in fully at 10 yuan, when the price returns to 10 yuan, you will just have broken even.
Position management is the ultimate trick to protect your wallet. You need to learn to set a safety line for yourself; once you make a bit of money, quickly place a 'protection shield'—a stop-loss order—near the opening price, so even if the market turns against you, your principal can be protected. This is especially important when trading those small altcoins; when the price rises, you need to be clever, widen your take-profit point, and adjust it according to the price movement, while also remembering to place that 'protection shield'.
Never let a small profit make you complacent; you must know when to take profits. If you accidentally incur a loss, don’t let emotions drive you to invest again out of spite, as that will only lead to greater losses. Remember to follow the trend; don’t always think about bottom fishing for cheap; the real bottom is determined by the market, not by your guesses.
You need to have a fixed trading system; don’t change your mind every day, as that will only leave you confused. Be patient and don’t always think about chasing highs and cutting losses; corrections are good opportunities. Also, manage your position and leverage well; don’t forget your limits once you start making money; stop when it’s time to stop.
Let's talk about trading mentality, which is the key to whether you can stay in the crypto world for a long time. When you encounter floating profit turning into floating loss, you must keep your composure and not let emotions cloud your judgment. Remember, trading is all about mentality; you must learn to contend with your own psychology and not let temporary gains or losses affect your emotions.
If you want to thrive in the crypto world, you must keep learning and enriching yourself. Summarize every day, learn from experience and lessons, and improve your trading skills. Only in this way can you stand firm in this unpredictable market and earn abundantly.
In summary, position management and trading mentality are two essential treasures of trading in the crypto world.
Newcomers, if you want to make money in the crypto world, you must practice these two tricks well.
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