$BTC

Most people facing a loss will just endure it, not knowing there are more scientific ways to resolve it. You stay up late watching the market for precise bottom fishing, yet the market continues to plummet. Once your positions are trapped, should you cut your losses, add to your positions, or let it be? 90% of people make the wrong choice and end up with a total loss. Today, I will share the common techniques professional traders use to resolve losses. Once mastered, these techniques can not only turn danger into safety but might even allow for a turnaround.

First Move: Determine 'True Loss' vs. 'False Loss'

True Loss: When the trend completely reverses, such as breaking below a key support level on the weekly chart, you must stop loss immediately.

False Loss: Just a short-term shakeout, like a quick needle spike followed by a rapid recovery, can wait for a rebound.

Technique: Use 'Multi-Timeframe Resonance' to judge; look at the overall direction on the 1-hour chart, find entry opportunities on the 15-minute chart, and closely monitor reversal signals on the 5-minute chart.

Second Move: Dynamic Averaging Down Technique (Many people average down incorrectly)

Incorrect Approach: Averaging down after a 10% drop, resulting in greater losses and ultimately leading to a total loss due to heavy positions.

Correct Approach:

1. Only average down at key support levels.

2. Each averaging down amount should not exceed 50% of the original position.

3. After averaging down, bring the average price closer; when it rebounds near the cost price, first reduce half of the position.

Example: A certain coin drops from 1U to 0.7U; average down at the 0.65U support level and reduce the position when it rebounds to 0.8U, not only successfully resolving the loss but also making a 15% profit.

Third Move: Hedging Magic (90% of people don’t know this)

When you find that the trend may continue to decline and you don’t want to stop loss:

1. Open an equal volume opposite contract; for example, if long positions are trapped, open short positions to hedge.

2. Set the short position take profit equal to the long position cost price, so regardless of whether the market rises or falls, you can break even.

Advanced Play: Use options to hedge, which is cheaper and more efficient.

The core of resolving losses is to protect the principal. If the position exceeds 50%, it is advisable to first cut losses by 50%, and then use the aforementioned methods for the remaining portion.