Don't panic, even if you're in a losing position, you can still win this battle!
1. Four Major Strategies for Closing Long Positions
1. Decisive Stop Loss
Suitable for clear downward trends where there are no signs of reversal. The approach is to stop loss in a timely manner, directly cutting losses. If you anticipate further declines, you can hedge by opening a short position. The key is not to hold onto false hopes; if you need to exit, just do it, and it's best to set your stop loss before you open a position.
2. High Sell Low Buy
Suitable for choppy markets where prices fluctuate within a range. The approach is to reduce positions at resistance levels and buy back at support levels, taking advantage of price differences to lower costs. This operation requires you to accurately judge the range; otherwise, you may get trapped.
3. Lowering Costs
Suitable for markets nearing a temporary bottom, such as when there are signs of support stability or indicator divergence. The approach is to add positions at planned low levels to lower overall holding costs. Exit when the price rebounds near the cost line. However, if the judgment is wrong and the market continues to decline, this strategy may amplify losses, so special attention to risk control is necessary.
4. Short Hedging
Suitable for heavily trapped positions while being bearish in the short term but bullish in the long term. You can open a short position to hedge; for example, if you originally have 100 long positions, then open 120 short positions to offset losses from the long positions. Wait for the market to reverse, then close the short position. The key to this operation is to control the overall position to avoid losses on both sides.
2. Prevention-Oriented Trading Discipline
1. Set stop losses and take profits when opening positions, for example, stop loss at a 5% or 10% loss—don’t trade based on feelings.
2. Control your position size; do not exceed 20% of total funds in a single order to avoid being fully trapped in one go.
3. Trade with the trend; don’t stubbornly hold long positions in a clear downward trend, and don’t randomly short in an upward trend.
3. Additional Suggestions
Avoid frequent trading; opening and closing positions back and forth in a choppy market can lead to being shaken out and draining your patience due to transaction fees.
Stay updated on market dynamics; sometimes a policy or bad news can change the original market structure.
Maintain a good mindset; being trapped is not terrifying, but reckless averaging down and stubbornly holding positions is what truly causes losses. Following the plan is the key to long-term survival.
