"In the crypto circle, position management is more important than technical analysis."

This is advice from a professional trader who has achieved positive returns for three consecutive years. With a capital of 100U, he has achieved an average annualized return of 67% over the past 6 months using a mechanical position control strategy. Below is a position control framework verified by practice; after reading it, you will understand why 90% of people lose money, while top traders can continuously compound their returns.

One, the core concept of position control method

Use mathematics to counter human nature, use rules to restrain greed

Capital split: Each trade should not exceed 10% of total funds (100U capital → single position ≤ 10U)

Dynamic averaging down: Increase position size according to new capital ratio after profit (Example: 100U → 130U → new single position = 13U)

Profit and loss ratio lock: Each trade must have a profit and loss ratio of at least 1:2 (if you lose 1 yuan, you must earn 2 yuan)

Two, practical case: How to double 100U capital?

First Trade: Establishing a cushion for opening a position: Enter at 2685 points with 10U (10% of capital), stop loss at 2655 (1% fluctuation), take profit at 2715 (1.5% fluctuation) Result: Price rises to 2715, profit of 30% (capital → 130U)

Second Trade: Reinvesting profits. Open position: 2695 to add 13U (new capital 10%), stop loss at 2675 (0.7% fluctuation), take profit at 2735 (2.6% fluctuation). Result: Price triggers stop loss, loss of 10% (capital → 117U)

Third Trade: Trend confirmation for a strong strike. Open position: Invest 13U after breaking the previous high, move stop loss up by 5%, set take profit at 3% fluctuation. Result: Trend continues, profit of 34% (capital → 156U)

Fourth Trade: Accelerating compounding. Open position: Enter at 16U, reduce stop loss to 2%, expand take profit to 4%. Result: One-sided market explodes, profit of 50% (capital → 204U)

Key data: Win rate is only 50%, but profit and loss ratio reaches 2.6:1, maximum drawdown controlled within 12%

Three, Advanced Techniques: How to use position size to counter exchange tricks

1. Identify the 'pin needle harvesting zone'

Observe Binance contract big data: When the liquidation long-short ratio > 3:1, use high leverage cautiously; when the funding rate exceeds 0.1%, open a reverse hedge position

2. Liquidity Trap Defense

During periods of low liquidity on platforms like Bybit, OKX (e.g., UTC 0:00-4:00), reduce position size by 50%

Avoid trading during the system maintenance of the exchange 1 hour before and after

3. Black Swan response formula

Total risk exposure = single position risk × √number of positions

(Example: 5 positions, single position risk 2% → Total risk = 2% × 2.23 = 4.46%)

From loss to profit: You must achieve this

Daily review

Statistics on win rate, profit and loss ratio, maximum drawdown

Compare Binance Alpha strategy performance (over 60% of strategies can be followed)

Mandatory break of 4 hours after profit exceeds 30%

Stop trading for the day after 3 consecutive losses

Conclusion: Position control is the only moat for retail investors

The harsh truth of this strategy is: it won't make you rich overnight, but it can help you stay alive to see the next bull market. While you watch others gamble their lives with 100x leverage.