In this field of opportunities and challenges in the cryptocurrency market, many people are exploring the secrets to profit. I have always strongly recommended significantly increasing and decreasing positions to enhance returns and avoid risks. This method is worlds apart from those who are always fully invested, blindly optimistic, and can only leave their investments to fate after buying.
Position management is by no means a simple allocation of funds; its implementation is built on a deep analysis of the macro economy and a precise judgment of cryptocurrency market trends.
In fact, position management has another well-known name - timing. After years of crawling in the cryptocurrency circle, I finally feel I have enough experience and insight to write an article on how to time the market accurately in the crypto space, which also serves as a reward for my years of unremitting efforts. I am not someone who is diligent and persistent in all matters; in academics, basketball, and learning instruments, I often lose interest quickly, making me a typical 'fishing for leisure' expert. However, I have persisted in cryptocurrency investment for over a decade, always giving my all. Additionally, starting from the second half of 2023, I began sharing my investment experiences and insights on Zhihu, having written nearly 2 million words, which is a small achievement for me.
Ultimately, position management in the cryptocurrency market mainly exists in three states:
First, when extremely optimistic about the market outlook, choose to invest fully;
Secondly, when not optimistic about the market direction, decisively exit with no positions;
Thirdly, when the market situation is unclear and difficult to judge, also choose to hold no positions and wait.
These three states, seemingly simple, actually contain profound knowledge. To elaborate, after being in a fully invested state, if the cryptocurrency market rises sharply but the trend line begins to deteriorate while negative news continuously emerges, the investment's reliability decreases, so I will gradually empty my positions. Of course, I will not clear my positions with one click as in a simulated account; usually, it takes 2 to 4 days to gradually reduce my positions to zero. Similarly, when the market's downward trend begins to slow down and positive news starts appearing, I will also increase my positions from zero to fully invested within 2 to 4 days. From an operational perspective, it's that simple and direct.
However, in stark contrast to the simplicity of operations is the complexity and difficulty of market judgment. How to accurately judge whether the cryptocurrency market is strengthening or weakening requires the comprehensive use of technical analysis methods, precise grasp of macroeconomic rhythms, insight into market sentiment cycles, consideration of overall market valuation levels, and in-depth study of the real value of individual cryptocurrencies, among other factors, to make a comprehensive judgment. This judgment is highly subjective and cannot be quantified with specific data. Moreover, even with so many factors considered, the success rate of judgment is not very high. Fortunately, we trade less frequently, only acting when we have a strong grasp of market trends, so overall, achieving profitability is not difficult. When our judgments are correct, we can reap positive returns; when our judgments are wrong, most of the time, we simply miss out. Looking back, there have been very few instances of incorrect judgment when buying during bullish moments; a notable mistake occurred after August 2023. At that time, after the trend line broke, I did not exit in time, leading to a significant reversal of previous profits. However, upon reviewing later, it became clear that decisively reducing positions at the point of trend line break was the best response strategy, indicating that my control over position management was not mature enough at that time.
The core of trading lies in seeking unlimited profit with certain losses.
Do not treat price as a target, and do not regard short-term fluctuations as everything. True profit does not depend on short-term volatility, but on the skills learned and experiences accumulated during each rise and fall. Therefore, do not treat chasing prices as a way to make money; I have seen many who chase trends end up as mere fodder. The real winners are those who silently accumulate experience in the valleys because they know opportunities will eventually come. Do not treat emotions as strategies; do not let momentary impulses ruin your chance to make big money. First, learn to calm down and formulate your strategy; do not let the market's emotional fluctuations affect you. True profit is not a one-time explosion, but rather calm analysis and precise action. Welcome to discuss and learn together.
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