A few years ago, I took a friend and used a half-position compound strategy in a bull market, growing 50,000 to 500,000.
At first, he always went all in, making quick profits when the market rose, but losing even faster when it fell.
Later, I taught him a combination method of position splitting, timing, and trend defense, which not only stabilized returns but also reduced drawdowns to single digits.
This is the method used:
Pyramid Positioning
Divide the capital into 5 equal parts, each 20%, with a single position not exceeding one part.
This way, even if the judgment is wrong, there is room for adjustment.
Stop Loss is divided into two levels: a single loss should not exceed 2% of total capital, and at the same time, set a hard stop loss at a 10% price drop to prevent small losses from turning into large ones.
During profits, there are three steps for protection: move the break-even line up at 10% profit, take partial profits at 20%, and exit once the trend is broken (e.g., when EMA30 crosses down).
Volume Timing
A MACD golden cross on the daily line above the zero axis is an important signal for the market entering a main uptrend.
But it must be verified with trading volume: the breakout phase must have a volume greater than twice the average of the previous 5 days and continuously stronger than EMA20.
When resonance signals appear simultaneously on the weekly, daily, and 4-hour charts, the success rate is higher.
Trend Classification
Do not chase after prices have risen over 35% in 24 hours, RSI is above 85, or trading volume has surged by 5 times; these are often areas for major players to offload.
Trends are classified into three categories:
Danger Zone (short moving average death cross + increased volatility), reduce position by half;
Observation Zone (medium moving average flat + low volatility), maintain a small base position;
Offensive Zone (three moving averages in a bullish alignment), can increase position to half or even more.
Volume Decoding
Bottom characteristics are continuous increase in trading volume, OBV breaking past highs, and negative funding rates.
Top signals are volume increasing but prices stagnating, excessively high funding rates, and a surge in net inflow to exchanges.
Understanding these allows one to exit when others are most euphoric.
Review and Improvement
Spend 45 minutes every day reviewing: first look at the larger cycles (weekly shape, monthly indicators, quarterly structure).
Then check the trends and volatility of the holding coins, and finally assess stop-loss execution, profit-loss ratio, and trend duration, gradually optimizing the strategy.
The key to this method is using half positions to control risk, capturing trends with volume-price resonance, and avoiding chasing highs and panic selling through a classification mechanism.
When the market is good, one can capture waves; when the market is poor, keep the losses within a controllable range, making profits a certain outcome.
Daily orders, stable profits, precise strategies, let's work together to recover losses! Keep up!
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