Many people lose money not because they are going in the wrong direction, but because they fundamentally do not understand how to manage their positions well.
I have a friend who, when he first entered the market, knew nothing. He opened leverage recklessly and scrambled his funds, losing over 4 million in a few months. Later, when I helped him review his trades, I found out that it wasn't that he couldn't read the market, but that he completely didn't understand position control. After I taught him a simple position management method, within a few years, not only did he recover his losses, but he also multiplied his gains several times.
So today, I want to share some valuable insights with you. The key factor that truly determines whether you make big money or get liquidated is position management.
1. Don't try to eat the whole cake at once with spot trading; it's more important to learn to buy in batches.
Take 100U as an example, don't go all in at once. You can buy in three batches: first 30, then 40, and finally 30, which helps avoid buying at the peak and allows you to average out your costs when the price drops. This is suitable for those who are uncertain about the bottom position, especially for those looking at the 4-hour chart.
2. Futures are a double-edged sword; don’t let leverage take your life.
10x leverage on 10U is equivalent to 100U in spot trading. If you open a position of 100U, it actually has a risk exposure of 1000U. As long as the market fluctuates by 10%, you could get liquidated directly. So don’t underestimate leverage; if you're not careful, you could lose everything.
3. Stop-loss is not just about stopping losses; it’s about your survival baseline.
Personally, I limit my losses to a maximum of 1% of my total capital on each trade. This way, even if I lose 100 times in a row, I won’t go to zero. The key is to retain the qualification to “try again.” If you want to survive in the crypto world, you must prioritize survival.
4. Position size is not based on feelings but determined by your risk tolerance.
You should size your position based on how much you can afford to lose. For short-term trades, I can enter and exit quickly and take larger positions, but I never go beyond 3x leverage, as I can't withstand higher stop losses. Always calculate your exit strategy.
In the crypto world, it’s not about who trades aggressively, but who survives the longest. Manage your positions well, don’t be greedy, don’t panic, don’t gamble; the larger the market movement, the more opportunities there are. Remember this: if position management is not in place, entering the market is like going to a casino.
In the long run, this is even more important than choosing which coins to invest in.
