Entering the cryptocurrency world with 8000, after suffering a loss of 8 million due to contract liquidation, I re-entered the market with 200,000. In two years, I achieved 20 million again. The core wealth secret: 'Methods and Principles of Capital Management in Trading'
Summarized into a few points: 1. Combination: Investment direction 2. Position: How much to invest 3. Timing: When to enter and exit
Combination: Investment direction
Position: How much to invest
Timing: When to enter and exit
Methods of capital management:
1. Light position for testing, entering the market in batches;
2. Holding positions in line with the trend, increasing investment when profitable;
3. Setting stop-loss levels to limit losses;
4. Allowing profits to grow sufficiently while keeping losses small;
5. Avoid increasing positions against the trend, buying more as prices drop, attempting to lower costs, etc.
For those who engage in high-leverage investments, at least give yourself 10-20 opportunities to withstand significant risks, meaning the ability to not get liquidated even after 10-20 losses. Thus, divide your capital into 10-20 parts, using only one part for investment, while the rest is allocated to risk preparation funds.
This is to say, risk control funds. Moreover, even if the capital is divided into several parts, you must wait for a particularly clear trend and significant market movement before entering.
When applied to our investments, dividing the capital into 10-20 parts may mean that your short-term profit ability could decrease, but due to the significantly reduced risks, you will possess the ability for long-term profitability.
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