Deja Vu

In the cryptocurrency market, managing positions well will allow you to outperform the vast majority. The theme shared is the management of trading positions; how positions are managed directly determines your risk level, average holding price, and final profit size. This is arguably the most important aspect aside from direction and mindset. What is position management? Position management refers to a specific plan set for opening, increasing, decreasing, and clearing positions when you decide to trade cryptocurrencies. Good position management is one of our important means of risk avoidance, enabling us to minimize losses and maximize benefits! How should positions be managed? Is there a standard? Many traders fail mainly because they treat market analysis as the entirety of trading, as if analyzing the market alone can determine the outcome. In fact, market analysis is just a foundational task; the real determinants of success are the actions taken after the analysis, which are the issues you consider after entering the market. Position management includes capital management and risk control. The term 'position' should not be understood literally; it expresses when to increase positions, how much to increase, when to decrease positions, and how much to decrease. It is essentially a roadmap for 'entering the market, increasing positions, decreasing positions, and exiting the market.' Thus, the complete trading process should be: 1. Market analysis, which can utilize any technical analysis method. 2. Position management, where after entering, you must consider the potential scenarios: what to do if profits occur, whether to increase positions, take full profits and exit, or continue holding. If profits expand again, what to do? If losses occur, is it a stop-loss, holding the position, or partially exiting? How much of a loss would trigger a full exit? Position management will simultaneously consider risk and return factors. 3. Strictly execute trading; when your plan is clear, you need to implement it without letting market fluctuations disrupt your thoughts. 4. Summarize trading; after completing a trade, review it along with previous trades, covering samples across rising, falling, and fluctuating market conditions. Then based on this, improve and optimize market analysis, position management, and the trading execution process. First, we need to find an entry point based on our trading skills, which must be a support line. When the market is above the support line, the trend is upward; when the market breaks below the support line, the trend is downward. More importantly, the support line is also the basis for defining potential risks. When a stop-loss is placed below this support line, the potential risk is determined. If the initial stop-loss area below the support line is touched, one should exit or first close most positions, then gradually reduce positions as the market continues to decline until all positions are closed. Therefore, the potential profit range is above the support line, and the upward trend of the market has not ended, so theoretically, potential profits are unlimited. After entering the market and rising, we can hold the original position waiting for further increases, or incrementally increase positions based on the original holding.