$ZEC Do you always think that position management is just about controlling the amount of capital you enter the market with?
In fact, this is just the surface phenomenon.
The true essence of position management is to control your trading emotions, to remain calm amidst market fluctuations, and to avoid letting emotions dictate your decisions.
Imagine this: you are fully invested and hit a limit down, the market instantly enrages you. What is your first reaction?
Do you want to retaliate immediately, or do you want to randomly enter the market to 'get back' at it?
Once your emotions fluctuate too much, you are likely to make wrong decisions. If the situation spirals out of control, it often leads to one mistake after another, digging you deeper.
But what if you were only 10% invested and hit a limit down?
The situation would be completely different.
With a small position, not only can you alleviate the pressure caused by market fluctuations, but if your position is not high and the fundamentals are sound.
You could even continue to hold your position with a calm mindset. Even if you have to cut losses, it won't be devastating, and your emotions won't collapse.
Emotions directly affect your mindset, and your mindset directly impacts your responses, which determines whether you can profit steadily.
The secret to good position management is very simple: it's to go slow!
Develop a habit of making decisions after 2:30 PM.
By this time, the overall market trend is usually clear, and there won't be too much volatility.
If you can slow down and not rush to act first, the probability of making mistakes will be greatly reduced.
Slowing down can actually lead to quicker profits!
Position management is not just something that large funds need to do.
Every trader, regardless of the size of their capital, needs position management.
Because its essence is risk management, and even more so, mindset management.
No technology can replace the role of position management; it is a strategy in trading that no other technology can match.
I have been in the crypto space for 10 years, and these experiences are my genuine insights, not empty theories.
Only by understanding position management can trading be considered a true entry point.
As long as you understand this, you will find that your trading mindset and attitude will undergo a qualitative change, which will in turn affect your profitability.
