What is the most painful part of trading? It's not being wrong and hitting the stop loss, but knowing you correctly identified a major trend and ended up only making pocket money!
Have you ever been conflicted like this:
Go all in?
A reverse fluctuation could halve your account, and you can't sleep at night because your hands are shaking...
Try a small position? You finally catch a trend, but the position is too small, and the money earned isn't even enough to cover the fees...
The question arises: How can you avoid blowing up your account while still making big money?
1. Why do experts use profits to add positions?
Adding positions with profits simply means "using the market's money to earn more money from the market."
Start with a light position: if wrong, a small loss
If right, let the profits run.
Profit cushion: After the trend moves favorably, use profits to add positions, so the stop loss for the new position can be set at break-even, with the worst-case scenario being no profit, but absolutely no loss.
The higher the price goes, the heavier the position: The stronger the trend, the more your position automatically increases, allowing you to capture the entire segment of the trend.
But! 90% of people use the wrong method, ending up adding positions halfway up, and during a pullback, they are back to square one.
2. Adding positions is not just mindlessly piling up chips
Many people get excited at the sight of profits and immediately add positions, resulting in:
Adding too early: The market only has a small rebound, and after adding positions, they get stuck, losing profits.
Adding too heavily: Pyramid adding (1 lot → 2 lots → 4 lots…), and in the last addition, the market reverses, losing all profits.
The correct way to add positions:
Initial position not exceeding 5%
Wait for market confirmation
Reduce the number of added positions
Stop loss must be adjusted
3. When should you absolutely not add positions?
Adding positions with profits cannot be used at any time; in these situations, it’s better to miss out than to add incorrectly:
The market suddenly has huge volume but the price doesn’t rise
After consecutive acceleration in price up/down
Before important news is announced
Always remember: the last position added must be the one with the least risk!
If you have some profits, but the market starts to fluctuate, would you choose to add positions or take profits?
If you want to accurately time your buy and sell points, follow @king说趋势 , the market changes rapidly, don’t wait until you miss out to regret it!
