Systematic Rules for Position Management

Balancing Diversification and Concentration

Core-Satellite Strategy: Allocate 60%-70% of funds to low-volatility assets such as Bitcoin and Ethereum, and 30%-40% to high-risk targets like altcoins, with a single asset position not exceeding 20% of total assets.

Cross-Cycle Allocation: Increase high-risk positions to 50% during bull markets, and reduce to below 20% during bear markets while increasing the proportion of stablecoins.

Structured Position Building Methods

Pyramid Scaling: Initial position size of 20%, adding another 10% position for every 10% price increase, but subsequent scaling decreases (e.g., first 20%, second 15%).

Funnel Bottom Fishing: Gradually increase the scaling ratio in left-side trading (e.g., first 10%, add 15% when the price drops 10%), with at least 5 times of additional funding reserved to cope with extreme market conditions.

Leverage and Risk Control

Leverage Cap Principle: Contract trading leverage should not exceed 3 times, and high-volatility altcoins should not use leverage. For example, the margin for Bitcoin contracts should be less than 30% of the total account equity.

Liquidation Prevention Formula: Risk Level = Position Margin / Total Equity, which should be kept below 50%. If total funds are $10,000, the margin for a single contract should not exceed $3,000.