In the cryptocurrency market, even with a small amount of money like three to five thousand yuan, it is possible to achieve profits through reasonable strategies and risk management.
1. Divide your funds into 5 parts, entering only one-fifth each time! Control a stop loss of 10 points; if you make one mistake, you only lose 2% of your total funds, and if you make 5 mistakes, you lose 10% of your total funds. If you are correct, set a take profit of more than 10 points. Do you think you'll still get trapped?
2. How can you further increase your win rate? In simple terms, it's just two words: follow the trend! In a downtrend, every rebound is a trap for more buyers, while in an uptrend, every drop creates a golden opportunity! Which do you think is easier to make money: bottom fishing or buying on dips?
Do not touch coins that have rapidly surged in the short term, whether mainstream or altcoins. Very few coins can go through several major upward trends. The logic is that it's difficult for coins to continue rising after short-term surges. When prices stagnate at high levels, they naturally will fall later. It's a simple principle, yet many still want to take a gamble.
You can use MACD to determine entry and exit points. If the DIF line and DEA cross above the 0 axis, breaking through the 0 axis serves as a solid entry signal. When MACD forms a death cross above the 0 axis and runs downward, it can be viewed as a signal to reduce positions.
Unknown who invented the term averaging down, causing many retail investors to stumble and suffer heavy losses! Many people keep averaging down as they lose, and lose more as they average down, which is the biggest taboo in trading coins. Remember to never average down while losing, but to add positions when in profit.
Volume-price indicators are crucial; trading volume is the soul of the crypto market. Pay attention to volume breakthroughs at low positions during consolidation, and decisively exit during high positions with volume stagnation.
Only trade coins in an upward trend, maximizing the odds and not wasting time. When the 3-day line turns upward, it indicates a short-term rise; when the 30-day line turns upward, it indicates a medium-term rise; when the 84-day line turns upward, it indicates a major upward trend; when the 120-day moving average turns upward, it indicates a long-term rise!
Persist in reviewing each session, checking if the coin holding strategy has changed, technically assessing whether the weekly K-line trend aligns with your judgment, and whether the direction has changed trends. Timely review and adjust trading strategies!
Secrets to advanced trading in the crypto world—position management; avoid heavy positions after a drop, escape from small profits and large losses.
In the crypto trading system, five issues need to be resolved: ① What to buy ② When to buy ③ How much to buy ④ When to sell ⑤ How much to sell
The key to what to buy lies in how to choose a potential target, and when to sell depends on how to take profits. Jiu Ge has discussed these two issues extensively.
How much to buy relates to position management issues. This is also a core problem! As I usually say: 50-60% position for mainstream, 30% for altcoins, and 10% for contracts. This method may not allow you to achieve ten or hundred times. But looking at this bull market, how many people are really making money? The ultimate reason is position management.
As for when to sell and how much; this can be executed according to the specific planning of the position.
So what exactly is position management? Are there any small tips to reference for good position management?
Three types of position management
01
First, the rectangular position management method.
This method refers to dividing all positions equally, with each position being the same amount. Common position ratios include thirds, fifths, or even tenths.
This method is more suitable in a fluctuating market. If we cannot determine whether the future market is in an upward or downward trend, we might as well gradually reduce risks through this fixed-amount incremental method.
02
Secondly, the funnel-type position management method, also known as the inverted pyramid management method.
As shown in the figure, this method divides the positions from bottom to top into 5 parts: 10%, 15%, 20%, 25%, and 30%.
So when is this method most appropriate to use? If we judge that the future market will maintain a prolonged downward trend, then this method can be tried.
At the beginning of a market downturn, we use this method to enter the market because the initial fund amount is small, allowing sufficient capital for subsequent position increases.
For example, let's say BTC's current net value is 65000. We set the accumulation range at a 10% drop, adding 10000 USD; when the net value drops by 20%, we add 20000 USD. If the market continues to drop, we add 30000 USD until the net value shows an increase.
In summary, this method is suitable for left-side trading, simply put, it's the process of bottom fishing, gaining potential future major upward trends.
Here, Jiu Ge wants to remind you that since we don't know when the real bottom will come, we must remember that the intervals between each position increase cannot be too close; otherwise, if the market bottom has not yet come, our ammunition will be exhausted. The key to this accumulation method is to manage subsequent funds well.
03
The last method is pyramid position management.
This method is exactly the opposite of the above content. It emphasizes investing a larger amount initially when establishing positions, and gradually decreasing the proportion of additional investments as the market rises.
This method is also called right-side trading, which involves entering when an upward trend has formed, acting in accordance with the trend to gain profits, suitable for when the market is performing well.
For example, when a bull market starts, we need to use ample capital to solidify our foundation, while the subsequent 30% or 20% increase in positions is done out of caution.
Old Wall Street principle
In a bull market, the most important thing is to hold on to your assets until a significant reversal signal appears.
Summary
After discussing these three types of position management methods, which one is better?
The market is ever-changing, and these three methods themselves have no good or bad distinctions. What matters is that we choose a suitable accumulation method based on our judgment of the market.
As the saying goes, which Jiu Ge likes very much:
The essence of investing is actually a manifestation of one's cognitive abilities.
Lastly, Zihau wants to remind us that no matter which position management method we adopt, we must keep a certain proportion of liquidity in our accounts so that we do not lose the right to choose.
At the same time, remember that good position management methods do not demand rigidity but should adapt to market changes to use the most suitable one.
Investment stems from life; it is part of our life. We can gain insights into the true meaning of life from investing and summarize investment rules from life experiences.
Most reasons for public investment failure are: insufficient execution, lack of patience, emotional fluctuations, and lack of a winning belief, etc. These flaws are also apparent in life. Investing requires learning not just how to make money, but also correcting various bad habits and thoughts, cultivating one's virtues, and on that basis, being able to manage money.
Successful investors are calm and composed. When we give up various desires, everything becomes uncontrollable, and we gain true freedom in body, mind, and finances.
"Fully invested" is not true bravery, "lightly held" is not great wisdom. Only those who can control their positions are truly strong at heart.
In summary, position management can simply be summarized in one sentence: do not easily increase leverage, do not easily fully invest, do not easily short sell.
Top ten anti-human nature iron rules in the crypto world: use "contrarian thinking" to harvest 90% of the retail investors
(Survival rules learned after five margin calls, the 7th rule boosted my win rate by 80%)
Iron rule 1: Withdraw courageously at the peak of profits
Anti-human nature operation: forcibly go flat for three days after consecutive profits
Bloody lesson: In December 2023, a trader made 300% profit on SOL but continued trading, returning all profits within a week.
Data support: Statistics show that 78% of traders who immediately trade after making a profit will incur a loss on the next trade.
Iron rule 2: Three days of losses trigger a circuit breaker.
Death spiral: Loss → Eager to recover → Bigger losses (explosion standard path)
Professional practice: Set an "emotional cooling period"; if losses reach 3% of capital, immediately stop for 24 hours.
Anti-human nature technique: delete trading app on the day of loss, physically isolate impulsive trading
Iron rule 3: Divergent markets remain motionless
Market truth: When the long/short ratio is 55-45, the probability of price spikes increases by 300%.
Anti-human nature signals:
Long/short ratio in exchanges is between 45%-55%
Opinions of prominent Twitter figures are severely divided
Hourly chart shows dense upper and lower shadows
Iron rule 4: High open 5% = "Please enter the trap"
Dealer script:
Morning session violently rises to attract trend-followers
10:30 sharp market crash to harvest
Counter-kill strategy:
Open more than 3%
Breakthrough previous high and stabilize for 15 minutes before considering
Iron rule 5: High open volume = death charge
Technical scam:
True breakthrough: volume moderately increases
False breakout: sudden large volume (selling signal)
Anti-human nature indicator:
Volume > 3 times daily average with price stagnating
Large orders concentrated in the sell side
Iron rule 6: Buy in a weak market during panic, buy in a strong market during consensus.
Cycle law:
Market status
Typical case
Unilateral decline, gradually acquiring bleeding positions, buying the bottom of BTC at 16000 USD in 2022
Unilateral rise, leading coins pull back to the 5-day line, 10 times market for ORDI in 2023
Iron rule 7: Adding positions = slow suicide
Deadly misconception: "Averaging down" is the most expensive lie
Mathematical truth:
Loss of 10% → Need to earn 11% to break even
Loss of 50% → Need to earn 100% to break even
Anti-human nature formula: Never add positions on losing trades, only add to winning trades with a 5% floating profit.
Iron rule 8: Only eat "profits within the model"
Cognitive trap:
Missing out on a skyrocketing coin → Anxiety → Chaotic trading
Caught a meme coin → Inflation → Overtrading
Professional discipline:
Define trading patterns in writing in advance (e.g., only trade BTC daily line breakthroughs)
Monthly trades ≤ 5 times
Iron rule 9: Right-side traders live forever
Left-side death cases:
"Since it has dropped so much, it should rebound" → Catching flying knives
"Already halved, it can't drop further" → ankle cutting
Anti-human nature buying points:
Breakthrough key resistance and pull back
First time above the 30-day moving average in a downtrend
Iron rule 10: The trend is your only boss
Weakness of human nature:
Bottom fishing during a downturn (counter-trend)
Short-selling during an uptrend (fear of heights)
:
Monthly line above MA5 → only go long
Weekly line below MA30 → only go short
Ultimate survival guide
Print ten hundred-dollar bills and stick them on the computer screen
Before placing an order, ask: Which iron rule does this operation violate?
Withdraw 10% immediately if monthly profit exceeds 20%
Remember:
The essence of making money in the crypto world is "picking up money when others make mistakes".
The more you violate these 10 iron rules, the higher your chances of making money.
Now! Immediately! Set the 7th rule as your phone wallpaper.
How to use contract leverage?
We often see people using fifty or a hundred times leverage, seemingly making several times their money instantly. Excluding those who are good at photo editing, I can tell you the screenshots are real. (Of course, if it's a few U and 100 U trading gods, then indeed no need for photo editing, luck can sometimes make it happen.)
But why can others boldly make profits while I crash at the first attempt?
In fact, the hundredfold leverage we see may not even be ten times. With 10% of funds, opening a hundredfold leverage results in an actual leverage rate of 10% × 100 = 10. So why still open high leverage?
The key lies in the utilization rate of funds! Opening ten times leverage with 100% of funds means all your funds are in the market. If you want to add positions, you are helpless. Opening a hundred times leverage with 10% of funds, although the actual leverage rate is the same, leaves 90% for adding positions, immediately increasing the utilization rate while risk remains unchanged.
So how many times of leverage should be opened? There is no fixed number!!! Leverage can allow your funds to be efficient, enough utilization is all that matters. Position size should not be determined by leverage multiple, but based on your actual stop loss. If your long stop loss is set at a drop of 100 points, and a drop of 100 points is 2.5%, then your total fund loss control should be 5%, and the position size should be double your principal. If you are using ten times leverage, then you still have eight times the principal available for other trades or to add positions; just enough is fine.
To summarize: Leverage is not about being higher for thrill or lower for safety. The real core is our ability to control risk, not the pursuit of multiplication thrill. This is a magnifier; if the thought is wrong, it will amplify losses; clear thinking is the tool to improve your efficiency. Don't blindly imitate screenshots, and don't simply mimic so-called 'big shots' operations; understanding principles and learning to calculate is essential for surviving longer in trading.
Regarding the use of leverage, I believe many profitable experts can make money without being so rigorous. I wish everyone profits and to lie flat soon!
Welcome to follow Rong Rong, where you can learn and communicate with real trading, also clearly understand market direction and strategies. No matter what style the market is, knowing in advance allows you to master it better!
The team still has spots available, hop on board quickly, and become both the dealer and the winner.
