Late at night, staring at the fluctuating numbers in my account as they changed from four figures to five, I always think back to that early morning three years ago when I got liquidated. At that time, my all-in altcoin suddenly plummeted, and I still vividly remember the moment the forced liquidation notification popped up, reflecting my pale face on the screen. From three liquidations that wiped out my savings to stabilizing a principal of 1000U to 10000U, today I am sharing my most valuable position management secrets without reservation. Understanding this article will help you avoid taking two more years of detours.
1. Surviving is the opportunity: the three life-and-death lines of position management
Many people often ask me, 'Which coin can double?' But what truly determines profit and loss is never the choice of coin, but position control. I've seen too many technical analysis experts lose everything and exit due to not understanding position management after one black swan event.
The 2% stop-loss rule is a lesson I learned through blood and tears. Before each trade, you must calculate: how much loss can this trade withstand at most? Divide 2% of total funds by the stop-loss point, which gives you the position size you should invest. For example, with a 1000U principal, the maximum stop-loss cannot exceed 20U; if the coin you're buying plans to stop-loss at 5%, then you can invest at most 400U (20U÷5%). Remember, surviving in the crypto market is more important than anything else. A continuous loss of 2% over five times only results in a total loss of 10%, but a single loss of 50% requires a doubling to break even.
The pyramid accumulation rule is the core of compound growth. When the first position's profit exceeds 3%, consider adding to the position only after confirming the trend is correct, with each additional amount being 50% of the last one. For instance, if the initial purchase is 300U, add 150U after reaching the profit target, then add 75U after reaching the next target. This way, you can amplify your profits while controlling risks, always letting the profitable positions protect your principal.
Dynamic position adjustment must closely follow market cycles. In a bull market, the position limit for a single coin can be raised to 30%, but 20% cash must be kept for flexibility; in a bear market, the position for a single coin must not exceed 15%, and the cash ratio should be at least 50%. During last year's LUNA crash, I was able to buy low during the panic sell-off due to sufficient cash reserves.
2. Breakdown of real trading strategies from 1000U to 10000U
Many people feel that their principal is too small to turn things around, but I turned 1000U into 10000U in just 8 months, thanks to this 'small fund compound interest model.'
In the starting phase (1000-3000U), you need to learn to 'focus the battlefield.' At this stage, do not hold more than 3 coins at the same time, and primarily target growth tokens with a market cap of 1 to 5 billion. Each time you build a position, do it in three steps: first use 20% of your funds to test the position, confirm the direction, then add 30%, and finally add 20% after breaking through key resistance levels, always keeping 30% cash to handle volatility. Last June, I used this method to trade AR, going from 12U to 28U, turning 200U principal into a profit of 260U, completing my first doubling.
In the advanced stage (3000-7000U), you need to build a 'currency portfolio.' At this stage, you can allocate 50% to mainstream coins (BTC/ETH) as a base, 30% to second-tier potential coins (like SOL/ADA), and 20% to small-cap leading coins. The key is to set staggered take-profit points: take profit on 20% of the position when gaining 30%, take profit on 30% when gaining 50%, and set a trailing stop-loss on the remaining 50% to seek greater returns. Using this method during the ETH market at the beginning of this year, I locked in a profit of 400U and also benefited from the subsequent doubling of the market.
In the sprint stage (7000-10000U), you need to strengthen 'risk hedging.' As funds approach the target, you should actually be more conservative, reducing the leverage from 3x to within 1x, while also using 5% of your funds to buy put options to hedge against systemic risks. Remember, the last step is the easiest to fail; before the FTX crash last November, my hedging strategy helped me avoid a potential loss of 3000U.
3. More important than technology: the underlying thinking of position management
In the end, trading reveals that position management is essentially about controlling human nature. In times of greed, one always wants to go all-in, while in times of fear, one cannot help but cut losses and exit. Solving these problems requires establishing a 'systematic trading journal.' I record the reasons for opening positions, the size of the positions, stop-loss and take-profit points, and actual profits and losses every day. During weekly reviews, I focus on analyzing 'trades that violate position rules.' After six months, you will find that your win rate automatically improves.
Here's a saying for everyone: In the crypto market, huge profits rely on luck, but stable profits rely on a system. When you can strictly enforce position management rules, turning 1000U into 10000U is just a matter of time; but if you keep thinking about getting rich overnight, turning 10000U into 1000U can happen with just one liquidation.
Interactive benefit: Leave your trading pain points in the comments section. The three questions with the most likes will be answered in detail during my live stream next week, combining real-time K-line analysis.
If you keep chasing rising prices and selling at losses, often getting stuck without the latest news in the crypto circle and lacking direction, click on my profile and follow me. I will never let you miss out, whether in a slow bull phase or sector rotation.
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