One, losses should be spent in three phases (life preservation first)
Assuming your capital is 200,000, you can lose a maximum of 40,000.
The most daring division must be broken down into: the first amount 10,000, the second amount 10,000, the third amount 20,000.
Remember: As long as you succeed once in three tries, you can stay at the table and continue playing. Not being pushed out by the market is the biggest victory!
Two, chasing highs and cutting losses can actually make money (anti-human nature operation)
Trends are easier to make money from than fluctuations, but you must be patient. Remember this secret: every big drop of 10-20% is a chance to get in!
For example, if Bitcoin drops from 80,000 to 70,000 (down 16%), don’t hesitate, decisively increase your position! Those not in should wait for such opportunities, and those in should hold steady.
Three, set a red line to make money (ironclad rule)
Lose a maximum of 5% of your capital per trade (for example, with a capital of 200,000, the maximum loss per trade is 10,000).
Earn at least 5% of your capital per trade (similarly, earning 10,000 is enough to cover the cost).
The number of profitable trades must be more than the number of losing trades (for example, in 10 trades, at least 6 must be profitable).
Mathematical formula: Total profit = Capital × (Average profit per trade × Win rate - Average loss per trade × Loss rate). Simply put, as long as you have enough profitable trades, or earn enough in a single trade, you can ensure profits without losses.
Four, if your hands are itchy, cut them off (control your hands)
Trading 24 hours is a trap! Newbies are most likely to operate every day, and the result is "walking by the river all the time, you will eventually get your shoes wet". It is recommended to operate a maximum of 5 times a month, each time waiting for a rebound opportunity after a crash.
Rolling positions
More patient than dating: wait for that kind of crash followed by a few months of sideways movement, suddenly surging upward "golden pit", waiting twice a year is enough.
Only go long, never short: making money in a downtrend is for experts, newbies should only catch the upward trend.
Get on board early: when the trend reversal point (like breaking the 20-day moving average) occurs, immediately take a heavy position, don’t wait until it goes up to chase high.
Lastly, let me say a big truth: trading is not about who is smarter, but about who survives longer. Preserve your capital, wait for your opportunity, and you can multiply it several times in one go!
If you are new to the market, you can follow me to discuss and exchange ideas together!!!
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