Position management is the 'life-saving technique' in the crypto world - in the same market, some lose everything overnight due to uncontrolled positions, while others steadily profit through reasonable layouts. These 6 principles are practical experiences gained by many through losses, and are essential for beginners:
One, never go fully invested: Leave a 'buffer' for your capital.
Going fully invested is equivalent to betting all your chips on one game; once the market suddenly crashes (for example, negative news leads to a 10% drop in a day), there won't even be a chance to average down costs.
The correct approach: Always keep 20%-30% of spare funds. This part of the capital is both 'buying bullets' (can add positions during sharp declines) and a 'risk shield' (to cope with platform failures, policy changes, and other sudden situations). Remember: The market is not short of opportunities; it lacks the patience to operate with available funds.
Two, batch buy and sell: Use 'gradient strategy' to dilute risk.
A one-time all-in buy may lead to purchasing at a short-term high; a one-time all-out sell may cause missing out on subsequent gains.
Buy in batches: Increase positions proportionally during declines (for example, add 10% when down 8%-10%), thereby lowering the average holding price through multiple purchases.
Sell in batches: Take profit according to targets during uptrends (for example, sell 30% when up 20%, sell another 30% when up 50%), both locking in some profits and avoiding missing out on subsequent trends.
By operating this way, even if you cannot buy at the lowest point or sell at the highest point, you can outperform most retail investors through 'average price advantage'.
Three, position adjustment in the direction of the trend: Light positions to preserve capital in bear markets, heavy positions to profit in bull markets.
The weight of the position must follow the market trend; resisting the trend will only lead to being harvested:
Bear market (overall downtrend): Position should not exceed 50%, and may even drop below 30%. At this time, most currencies continue to depreciate; less trading means less loss.
Bull market (overall uptrend): Position can be increased to 70%-80%, but make sure to keep 20% as flexible funds - which allows you to chase strong currencies and also to add positions during pullbacks, avoiding 'full position misses' or 'full position losses'.
Four, dynamic adjustment: Let the position 'move' with the market.
Market conditions will not remain static; clinging to fixed positions is akin to seeking a sword by carving a boat:
When the holding currency breaks through key resistance levels (e.g., Bitcoin stabilizing above previous highs), you can slightly increase your position (10%-20%) to expand profits in the direction of the trend;
When a breakdown signal occurs (e.g., breaking important support levels), decisively reduce your position (30%-50%) to prevent losses from expanding.
Core logic: Use position changes to respond to risks, rather than passively bear risks after they occur.
Five, stay in cash during downturns: Learning to 'rest' is also a way to profit.
When the market is in a long-term sideways trend with scattered hotspots (e.g., fluctuations under 5% for a month), forced trading will only increase the error rate.
At this time, the best strategy is to stay in cash and observe: Convert funds into stablecoins (like USDT) and patiently wait for a clear trend (e.g., a breakout from the sideways range). Remember: Money in the crypto market is made from 'trending money', not from 'frequent trading fees'.
Six, position swapping rules: Hold onto strong currencies and let go of 'dead weight'.
The same amount of capital, when placed in different currencies, may yield vastly different profits:
Regularly (such as weekly) review your positions: Clear out currencies that have lagged behind in gains or weakened in trend (e.g., those that have underperformed the market for two consecutive weeks) and replace them with stronger mainstream coins or hot currencies;
Position swapping is not about 'chasing hotspots', but focusing on 'the strong remain strong' - funds will always flow towards more promising targets; clinging to weak currencies will only waste market opportunities.
Final reminder: The core of position management is not 'precise calculation', but 'establishing discipline'. Strictly following these 6 principles already helps you avoid 80% of the loss traps in the cryptocurrency market. Remember: Surviving is key to waiting for opportunities to profit.
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