I only trade in the spot market because it eliminates the risk of permanent loss. I observe market fluctuations and make a purchase when the price reaches a favorable level. However, I never invest my entire capital all at once.

To manage risk, I always keep a portion of my capital in reserve. If the market moves against my initial entry, I use this reserved capital to DCA (dollar-cost average) and lower the average purchase price of my holdings.

I follow a capital allocation strategy based on a 1:1:2:4 ratio. For example, if I invest 1 unit of capital in my initial trade and the market declines, I invest another 1 unit. If it continues to fall, I follow up with 2 units, and finally 4 units if necessary. This structured approach allows me to average down effectively and manage risk without exposing myself to significant loss.