Why do most people lose in position management?
After many years of trading, I have found a mistake that almost 99% of retail investors make:
They can't hold onto positions when the trend is favorable and stubbornly cling to positions against the trend.
When the trend is favorable, the market is still moving, and your position could have captured a significant profit, but you insist on taking what you can get.
You grab a few points and run, only to find that the subsequent big market moves have nothing to do with you.
When the trend is unfavorable, it gets even more exaggerated.
Many people not only refuse to cut losses but also stubbornly hold on, even averaging down, resulting in a total mess.
What is the result of this behavior?
When you make money, you can only earn small amounts, but when you lose, you can lose everything.
Over time, the only outcome for your capital curve is: zero.
The real trading logic should be:
First, determine your stop-loss point (support/resistance), then decide on the position size.
For example:
If a strong coin has a support level that is very far away, then the position must be light, light enough that even if it drops to support, you can remain calm and not panic.
This way, you won't encounter the problem of "not being able to hold onto a favorable position" and "stubbornly holding onto an unfavorable position."
The core thinking of position management: hedging mindset.
Many people only know how to put all their money into buying coins; when it goes up, they're happy, and when it goes down, they can't understand it.
The truly mature approach is:
Enter with a light position, light enough that you even hope it drops further.
Why?
Because when it drops to the support level, you can actually average down.
And if it goes up, although your position is light, at least you're still making a profit.
This way, regardless of whether it goes up or down, you are in the "comfortable zone," and your mindset won't be swayed by the market.
This is the most core power of position management:
Controlling position = controlling mindset.
Many people haven't truly understood the essence of position management; they just struggle repeatedly between "cutting losses at points" and "going all in."
What I can tell you is: position management is far more important than you imagine, even more critical than what indicators you use or what candlesticks you look at.
It's not scary to be wrong in direction; being wrong in position is the real fatal injury.
