In the risk market, those who survive are not necessarily the ones who make the most money, but those who understand how to control their positions.
'Teacher, there are only 800 units left in the account, and it's about to be liquidated! Is there any hope?' When I received this private message two months ago, I could sense the anxiety through the words. I've seen many requests like this, most people come seeking a 'get-rich-quick scheme', but this person's situation was indeed tricky.
What surprised me was that just a few days ago, he sent a screenshot of his account—7400 units, more than 9 times its original amount! No exuberant bragging, just two simple words: 'Thank you.'
This is not the work of some magical trading code or insider information. In fact, I didn't even let him study any complex technical indicators. After years of navigating the crypto market, I deeply understand one principle: when the account is on the brink of liquidation, the most important thing is not to make quick money, but to survive first.
This young man was initially a typical 'impulsive trader': he would jump in with all his capital when others called out trades, felt euphoric after making some profits, but stubbornly held on when losing, and the results go without saying. I told him: 'The market is always there, but once the principal is gone, it's really gone. First, learn to 'test the waters' with a small position, then talk about making money.'
He strictly implemented the 'three-tier position management method' I taught, which allowed him to achieve a turnaround. Today, I share this method with everyone, especially suitable for friends with limited capital who want to survive in the market for the long term.
Step one: Trial position - sense the market at the lowest cost.
I had him take out 300 units from 800 as a 'trial position,' focusing on several small coins in popular tracks. The goal was not to make profits, but to cultivate market intuition and patience.
At that time, he chose a privacy computing project and started to build a small position around 0.5. After confirming the correct direction, he did not increase his position by more than 20% of the existing position each time. Once he misjudged, but since the position was light, he only lost a few dozen units after stopping loss, which had almost no impact on the principal.
Core idea: The core value of small position trial and error is not in how much you earn, but in accumulating experience at the lowest cost. Losing all 300 units won’t hurt your vitality, but charging in with a full position of 800 units could risk zeroing out in one mistake.
Step two: Profit position - use 'earned money' to expand the victory.
When his trial position grew from 300 to 600, I introduced a new rule: withdraw 30% of each profit as a safety cushion and keep the remaining 70% as a 'profit position' to continue rolling.
Later, he seized the rebound of a public chain, using the profits earned earlier to increase his position. Even when there were pullbacks during the process, he remained calm—because he was using 'earned money', which made a completely different mindset.
The key to this step is 'step-by-step take-profit.' Don't fantasize about selling at the highest point; many people want 20% after making 10%, only to end up losing and exiting. First, secure part of the profit, and use the profits to gamble; even if you incur losses, it won't hurt the principal.
Step three: Risk control position - protecting profits is the real victory.
When the account exceeded 5000 units, I required him to strictly implement risk control discipline: stop trading if daily profits exceed 10%, and stop trading if daily losses reach 5%, with any single position not exceeding 20% of total funds.
Once, the anonymous project he held rose from 85 to 120, triggering a take-profit point, and he decisively sold. Later, the project retraced to below 100, and he candidly said: 'Fortunately, I strictly followed the discipline; otherwise, the profits would have gone back.'
In the cryptocurrency market, making money is easy, but keeping it is hard. Those who can survive long-term see risk control as a lifeline.
The core thinking of position management.
Gann emphasized in his classic rules: 'Divide the principal into 10 parts, and use no more than one-tenth of the principal in a single trade.' This coincides with my 'three-tier position management method.'
At the same time, avoid easily changing plans due to panic. Once you set a stop-loss point and target, you should patiently wait for the market to validate it, rather than getting flustered by short-term fluctuations.
In a bull market, don't try to short the trend. Bull markets in the crypto market often have strong momentum, and going against the trend carries great risks. Following the trend and managing positions wisely within it is the wise choice.
Another advanced method is the 'rolling investment method,' which means gradually investing funds and rolling both principal and interest into the next round of investment after reaching the take-profit point. This method is especially effective in a clearly trending market.
Conclusion: Surviving is victory.
In the crypto industry, many people want to get rich overnight, but the result is often liquidation overnight. The real winners are not those who make the highest short-term profits, but those who can survive long-term in the market.
Position management seems simple, but it is actually the most self-disciplined aspect of trading. It cannot guarantee that you are right every time, but it can ensure that even if you misjudge the direction, you can survive to the next bull market.
I hope this method inspires you. Remember: in this market, surviving longer is more important than making quick profits. Follow Xiang Ge to learn more first-hand information and cryptocurrency knowledge at precise points, becoming your navigation in the crypto world; learning is your greatest wealth!
