Quick Guide to Unwinding Positions in 3 Steps, Reduce Losses with These Tips!
1. Assessing the Position Situation
Light Position: Price deviation is small, trend has not completely reversed
Deep Position: Price has significantly reversed, losses are evident
Locked Position: Both long and short positions are held, passive on both ends
2. Practical Strategies for Unwinding Positions
1. Responding to Light Positions: Wait for the price to pull back to the support level, appropriately add to the position to lower costs, and sell together after a rebound
2. Handling Deep Positions: Decisively cut some positions to stop losses, if the trend confirms a reversal, open a position in the opposite direction to recover losses
3. Solution for Locked Positions: First close the profitable positions, keep the losing positions under observation, close in the direction of the trend or sell high and buy low to reduce losses
3. Key to Preventing Secondary Losses
Every position must set a stop-loss to avoid large losses
Single trades should not exceed 15% of total capital
Exercise caution during major data releases
There is no universal formula for unwinding positions; it needs to be flexibly adjusted based on market conditions, capital status, and personal risk tolerance. Remember, the ultimate goal of unwinding positions is not to 'break even', but to convert losses into experience and confidence for subsequent trades through reasonable operations. Stay rational, respect the market, and you can progress steadily in your investment journey.
