What is the most torturous moment in trading? It's not the judgment error that leads to a stop-loss exit, but clearly catching the big trend only to end up with just a sip of soup!
This pain is something only those who have experienced it can understand:
Full margin gamble?
A reverse spike, and the account instantly shrinks by half, staring at the screen late at night with fingers going cold...
Light position trial?
When the market finally moves, that little position won’t even cover the gas fees...
How to play to preserve capital while not missing out on the big market?
The profit snowball strategy used by top traders
This is not some mysticism, but letting the money you’ve already made help you make more.
First trial order: if wrong, consider it tuition; if right, start the performance.
Profit moat: once the trend is confirmed, use floating profits to increase the position, set the stop-loss of the new position at the cost line, and at worst, this order is just a practice.
The stronger the trend, the heavier the position: like surfing, the bigger the wave, the higher you stand, capturing the entire trend.
But be careful! Most people fail because they randomly increase positions, turning into live targets in the market.
Increasing positions is an art, not gambling.
The most common fatal mistake for beginners:
As soon as there's a bit of profit, they rush to increase the position, only to be shaken out by volatility.
Inverted pyramid style of increasing positions (1→2→4…), ultimately becoming the high position buyer.
The truly smart way to play:
The first position never exceeds 5% of capital.
Wait for key breakthroughs to be confirmed.
Decrease the amount when increasing positions.
Dynamically adjust the stop-loss line.
At these times, it’s better to miss out than to increase the position.
Profit snowballing is not a panacea; when facing these situations, please restrain yourself:
Volume surges but price remains stagnant.
Acceleration phase after continuous surges/drops.
Vacuum period before major policy announcements.
Remember the iron rule: the last position increase must be at a level that allows you to sleep soundly!
Now, let’s test you: when your position is already profitable but the market starts to consolidate, will you choose to increase the position or take profits? This decision often marks the dividing line between experts and amateurs.