In the cryptocurrency space, many people lose money not because they are looking in the wrong direction, but because they have entered the wrong position from the start. $BEAT
There is an old saying that is rough but not unreasonable: “Those who know how to buy are apprentices, those who know how to sell are masters, and those who know how to stay out are the ancestors.”
But those who can truly survive in the market rely not only on the composure of staying out but also on the clarity of knowing how to allocate positions and manage risks.
What is position management? $BNB
In simple terms, it involves four things:
• How much money are you planning to use for this trade?
• How to enter and exit in batches?
• How much reserve do you keep to deal with unexpected situations?
• At what point must you acknowledge your mistake and exit?
This is not some advanced technique, but rather the fundamental ability that determines whether you can stay at the table. Reasonable position control can help you reduce risks and maintain a stable mindset.
The most common scenarios of losing money often stem from uncontrollable positions.
• Going all in on a full position, getting trapped with slight fluctuations;
• Adding aggressively after a slight increase, getting severely injured when a correction comes;
• When an opportunity truly arises, being afraid to take action due to previous losses;
• Not setting stop losses, holding onto fantasies and stubbornly resisting, resulting in increasing losses.
You will find that most losses are not due to misjudgment, but rather due to complete loss of position management.
A few life-saving position principles:
1. The initial position should not exceed 30%
For example, with a principal of 100,000, the first investment should be a maximum of 30,000. If the direction is correct, gradually increase the position; if wrong, there is still a way out.
2. Enter in batches, don’t pursue perfect entry points
The market is unpredictable, and batch operations can smooth out costs and provide more room to maneuver.
3. Stop loss is the bottom line, not an option
Every time you open a position, it must come with a stop loss. This is not about admitting defeat, but about pricing errors and preserving capital for the next round.
4. Funds are divided into three layers: long-term, swing, and flexible
Different types of money serve different purposes, keeping the mindset stable.
5. Leverage is a double-edged sword; using it improperly will hurt yourself
High leverage will amplify losses, limit liquidity, and even lead to liquidation. Beginners should avoid using leverage, and experienced traders should strictly control the leverage ratio.
Market conditions determine how much you earn, while position management determines how long you can survive. With stable positions, your mindset won’t break; with a stable mindset, opportunities to make money will naturally come. Thank you for your attention and likes. @bit萧
