七七是十九
--
Many people lose all their investment in cryptocurrency, and the root cause is not the market, but the failure in position management.
Over the past few years, I have observed that the vast majority of retail investors have the same problem:
When the market is favorable, they cannot hold on; when the market turns against them, they stubbornly hold on until the end.
For example:
When the market is rising, and the trend is strong, you could easily take a large profit from your position, but due to fear of losing, you hastily close your position after earning just a few points. As a result, the price skyrockets afterward, and you can only anxiously watch from the sidelines.
However, once the direction is wrong, many people refuse to admit their losses; not only do they not cut their losses, but they also keep averaging down, ultimately falling deep into a quagmire.
This creates a vicious cycle:
When making money, they earn very little, but when losing money, they can wipe out their principal. Over time, the account balance can only head towards zero.
In fact, the logic is not complicated:
First, clarify the losses you can accept, and then decide how much to invest. For example, if a coin is very strong, but the key support level is far from the current price, then you must test the waters with a small position, light enough that even if it drops to the support level, you won't panic.
The core of position management is to keep yourself in a comfortable state.
Don’t always think about going all-in, as that will lead to exhilaration when the market rises and insomnia when it falls.
A mature approach is:
Start with a small position, and if it drops, you can add more; if it rises, although the profit may not be much, at least you are still in profit.
This way, regardless of whether the market rises or falls, you can maintain a stable mindset, rather than being led by the market.
Many people think position management is just a formula of "stop-loss + position size," but the true meaning lies in:
Controlling your position is about controlling your emotions.
Getting the direction wrong is not scary; what is truly deadly is having the wrong position size.
Over the past few years, I have observed that the vast majority of retail investors have the same problem:
When the market is favorable, they cannot hold on; when the market turns against them, they stubbornly hold on until the end.
For example:
When the market is rising, and the trend is strong, you could easily take a large profit from your position, but due to fear of losing, you hastily close your position after earning just a few points. As a result, the price skyrockets afterward, and you can only anxiously watch from the sidelines.
However, once the direction is wrong, many people refuse to admit their losses; not only do they not cut their losses, but they also keep averaging down, ultimately falling deep into a quagmire.
This creates a vicious cycle:
When making money, they earn very little, but when losing money, they can wipe out their principal. Over time, the account balance can only head towards zero.
In fact, the logic is not complicated:
First, clarify the losses you can accept, and then decide how much to invest. For example, if a coin is very strong, but the key support level is far from the current price, then you must test the waters with a small position, light enough that even if it drops to the support level, you won't panic.
The core of position management is to keep yourself in a comfortable state.
Don’t always think about going all-in, as that will lead to exhilaration when the market rises and insomnia when it falls.
A mature approach is:
Start with a small position, and if it drops, you can add more; if it rises, although the profit may not be much, at least you are still in profit.
This way, regardless of whether the market rises or falls, you can maintain a stable mindset, rather than being led by the market.
Many people think position management is just a formula of "stop-loss + position size," but the true meaning lies in:
Controlling your position is about controlling your emotions.
Getting the direction wrong is not scary; what is truly deadly is having the wrong position size.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
0
0