Today I will share the best practical tips with you:
The method of position management is to operate in batches.
Batching: Divided into equal portion batching and unequal portion batching.
First: Equal distribution, also known as rectangle trading method, refers to dividing funds into several equal parts and buying or selling in sequence, with the fund proportion for each buy and sell being the same. Usually, 3 or 4 equal parts are used. For example, first buy 30%, if you start to make a profit, buy another 30%, if there is no profit, temporarily do not invest new funds. When the price of the cryptocurrency reaches a certain high point or the market changes, gradually reduce positions and sell.
Second: Unequal distribution, refers to allocating funds in different proportions for buying or selling, such as ratios of 1:3:5, 1:2:3:4, 3:2:3, etc. Based on the proportions, the shapes can be categorized into: diamond, rectangle, hourglass, etc., with the pyramid trading method being common.
Third: Equal funds, equal positions, using different methods for comparison.
Pyramid: Buy 5 layers at 1000, buy 3 layers at 1100, buy 1 layer at 1200, average price 1055
Inverse Pyramid: Buy 1 layer at 1000, buy 3 layers at 1100, buy 5 layers at 1200, average price 1144
Equal portions rectangle: Buy 3 layers at 1000, buy 3 layers at 1100, buy 3 layers at 1200, average price 1100
Price rises to 1200 with respective profits: Pyramid 145, Inverse Pyramid 56, Rectangle 100
Price drops to 1000 with respective losses: Pyramid +55, Inverse Pyramid -144, Rectangle -100
For example: If a cryptocurrency falls to 10 yuan, buy 20% of the position, if the price drops to 8 yuan, then enter 30%, at this point the average cost is 8.6 yuan, if the market continues to drop to 5 yuan, then enter 40%, the average is 6.5 yuan. If the price rebounds to 6.5 yuan, it is break-even. If it rebounds to 10 yuan, it means a profit of 3.5 yuan. But if you fully invest when it is at 10 yuan, when the price returns to ten yuan, you have just broken even.
