Today I want to share with you a method of position management + trailing stop, which is a method I have used for a long time and is very effective. The specific operation is as follows:
First, when you open a position, you must choose to go long at the support level or go short at the resistance level; do not trade at other positions, as these positions have a win rate of up to 80%. Taking BTC as an example, if you plan to use 5% of your total position for trading, for instance, if you intend to short, you should choose to open a short position near the resistance level of 95500. Do not set the stop loss immediately, as it is very likely to break through the resistance level. Of course, this feeling is very low; if it does not succeed in breaking through, you can directly take profits. If BTC breaks above the resistance of 95500, then you should choose to add to your short position at the next resistance level of 96200, making your average price 95850. Once BTC reaches the resistance level of 96200, it will definitely retrace. As long as the retracement drops below 95850, you will take half of your profit. Your position will still be 5%, but your average price will have risen to 95850. This way, if it fails at the resistance level of 96200, you can make a profit of 3000 USD. Each time there is a decline, you need to adjust your stop loss. Initially, the stop loss is set at the resistance level, and once you have made a profit, you set the opening price as the stop loss. This way, you will not lose money. If it continues to drop, set a take profit stop loss, and you will always make a profit. If it continues to break upwards, you can keep adding and reducing positions accordingly, ensuring you are neither stuck nor missing out on profits.
Friendly reminder: Always add to your position near the resistance level, as it is most likely to retrace near the resistance. Of course, you must also set a stop loss, as sometimes it may spike several thousand dollars in one go; this is extreme, with a probability of less than 10%.
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