Unblocking is using various methods to turn losses into profits after being trapped or to minimize losses. The essence of unblocking can be summarized as averaging costs. Once the cost is below zero, it is considered successful unblocking.
Below, Mu Qing proposes several methods for unblocking commonly trapped positions for investors' reference. I need to remind everyone that unblocking is a passive remedy in the case of investment losses and carries the risk of further losses. Therefore, these methods should be applied based on one's own situation and not blindly used; otherwise, it could lead to the outcome of 'killing the enemy by a hundred while losing three thousand of oneself.'
Secret point one: price difference [buy low and sell high]
The price difference, commonly known as 'buy low and sell high', is a very easy-to-operate method for unblocking positions. It involves closing trapped long positions at relatively high levels when the market is in a range oscillation, then buying again when the market drops to relatively low levels, waiting to sell at high levels again, thus making a profit from the price difference and achieving the goal of averaging costs.
Risk: The risk of price difference is relatively small. As long as one relies on the upper and lower bounds of the oscillation range, operations can proceed smoothly. However, if the oscillation range turns into a bottom, there is a risk of missing out when selling at the upper bound. If the oscillation range turns into a downward continuation, there is a risk of being trapped again when buying at the lower bound.
Secret point two: adding positions at low levels
This is the most widely used and simplest method of unblocking. When investors are trapped at high levels, they choose to hold their positions and then add positions at low levels, meaning buying the currency again at a lower price to unblock through market rebounds or reversals. When the market rebounds, the loss of long positions bought at high levels gradually decreases, while the profit from long positions bought at low levels gradually increases. Thus, even if the market does not return to its original height, it is relatively easy for investors to unblock; if the market develops well, there may also be opportunities for profit.
Secret point three: reducing positions at high levels
Reducing positions at high levels, as the name suggests, advises trapped investors to cut losses early. The premise is that investors have confirmed that their market judgment is incorrect. The approach is to decisively close positions at high levels during a rebound. This is a last resort strategy for unblocking when there is no hope of unblocking.
Cutting positions is not without strategy. Reducing positions at high levels can be implemented in two phases. The first phase is 'at high levels,' meaning that even if the main trend has deviated from one's original judgment, one must wait for a rebound that aligns with their interests before beginning to cut positions. The second phase is 'reducing positions.' It is important to note that 'reducing positions' should not mean 'cutting positions' all at once. Instead, it should be done step by step and with a plan. First, investors should analyze the stage of their trapped positions, confirming the development trend of the trapped currency.
If investors believe that the trapped currency is currently at a high position in the trend and is likely to reverse, they should decisively close positions heavily when the market slightly improves, following the principle of closing trapped short positions from heavy to light. If the trapped short positions are divided into ten parts, taking three opportunities to short as an example, the short-selling ratio at this time is roughly 7:2:1. In short, the greater the risk, the faster one should run.
If one is in a trend's low position, it means that the current market situation does not match the original judgment, but there is a possibility of turning back to the original judgment in the short term. Investors need not rush to exit. When the market partially rebounds, follow the principle of closing positions from light to heavy, with a short-selling ratio of roughly 3:3:4. It is also advisable to appropriately extend the time interval for short-selling opportunities and even keep a small amount of trapped positions in hopes of making a small profit after the market reverses.
Risk: The difficulty of reducing positions at high levels lies in how to confirm that the market judgment is wrong and when to make a decision. If the main trend of the market aligns with the original judgment but the current trend deviates, investors may lose profitable opportunities. However, if investors discover that the market judgment is wrong but realize it too late, they often incur certain losses.
Note: The heavier the trapped position of the investor, the sooner it should be reduced at high levels. The longer the delay, the greater the loss. If you don’t understand, you can ask Fengchu. This fully reflects the principle that 'time is money.'
If you do not manage your finances, your finances will not manage you. Having money should not mean being willful; there is a natural way to generate wealth. For investments, please consult Teacher Fengchu for guidance!
Three elements of trading:
Trend is king; go with the trend, and going against it leads to demise.
2. Entering lightly and gradually increasing positions can avoid losses from sudden market movements.
Every trade must have strict stop-losses; do not casually enlarge stop-losses or set none at all.
Some investors who have incurred losses can never forget the past. When making new trades, they always think about how to recover all previous losses, which unconsciously makes them lose the ability to calmly analyze and judge market changes. When it's time to profit, they hesitate, only thinking of getting more profits, resulting in continued losses. Forgetting the past is difficult, but making a trade is easy. So start over, do each trade seriously; this may be the best way to forget the past.
The above is the trading experience shared by Mu Qing today. Many times, you lose many opportunities to make money because of your doubts. If you do not dare to boldly try, touch, or understand, how can you know the pros and cons? You will only know what the next step is after you take the first step. A cup of warm tea, a piece of advice; I am both a teacher and a good friend who talks with you.
Meeting is fate, knowing each other is destiny. Mu Qing firmly believes that those who are destined will eventually meet, while those who are not destined will just pass by. The investment journey is long, and the gains and losses of the moment are only the tip of the iceberg. One must understand that the wise may have a loss in their many thoughts, while the foolish may gain from their few thoughts. Regardless of emotions, time will not stop because of you. Pick up the worries in your heart and stand up again to move forward.
I am Mu Qing, having experienced multiple bull markets and possessing rich market experience in various financial sectors. Follow Crypto Mu Qing, and here, penetrate the fog of information to discover the real market. Seize more opportunities for wealth creation and discover truly valuable opportunities. Don't miss out again and regret it!
Teaching someone to fish is better than giving them fish. In Mu Qing's circles, investors, whether novices or experts, gain not only financial returns but also growth in investment knowledge and experience. In following Mu Qing's investment process, Mu Qing will provide investors with analytical thinking for market trends, basic knowledge of market watching, and methods for using various investment tools. At the same time, exciting fundamental interpretations, clarifications of chaotic international situations, and distinctions of various investment forces will be presented, allowing you to become both a winner and an expert in investing!
In the currency circle, mastering the seven trading principles is essential to understand the ebb and flow of investments, to be steady as a rock in favorable winds, and to turn danger into safety in traps. The instructor has traversed the market for many years, deeply understanding opportunities and pitfalls. If your investments are not going well and you feel regret over losses, you can contact the instructor, and I will correct your past. If you are currently profitable, I will teach you how to maintain your profits. If you are still lost in the market, the instructor is willing to guide you forward. The true tragedy of trading lies not in how much you suffer, but in how many opportunities you miss! Seize the present and move forward together. I am the instructor, a person who will leave a name in the currency circle in the future.
