Never turn a trade that could have made money into a loss by eventually getting stopped out. Your stop-loss limit should move upward in sync with your profits.
This isn’t just ordinary stop-loss.
You can use the analogy of climbing Mount Qomolangma. No one can reach the summit in one shot. You have to set up camp at Camp 1 first, then go on to Camp 2. If the weather suddenly worsens, you don’t need to retreat all the way back to the bottom base camp. Retreating to the previous camp to take shelter is enough. Trading works the same way.
For example: you enter at 10 and buy crypto. At first, you set your defense level (stop-loss) at 8. The market is strong and pushes you all the way up to 13. Most new traders then have their heads full of target prices like 15 or 20. They may even already be planning to spend their profits, but their stop-loss defense is still at 8.
That’s where the risk gets buried. When the market flips, the price drops from 13 to 11, and your mindset collapses instantly. You start thinking: I didn’t sell when I was up 3, so if I sell now wouldn’t I just be turning profit into nothing? So you choose to stubbornly hold. When it falls back to your 10-cost line, you’re still hoping it will bounce back. But once it breaks directly below 8, in the end you can only cut your losses and exit reluctantly.
So how would someone who knows how to trade handle it? When the price rises to 13, they would move the defense level up to 11—at the very least, back up to their 10-cost break-even line.
That’s what “zero-cost” positioning is.#BTC
This isn’t just ordinary stop-loss.
You can use the analogy of climbing Mount Qomolangma. No one can reach the summit in one shot. You have to set up camp at Camp 1 first, then go on to Camp 2. If the weather suddenly worsens, you don’t need to retreat all the way back to the bottom base camp. Retreating to the previous camp to take shelter is enough. Trading works the same way.
For example: you enter at 10 and buy crypto. At first, you set your defense level (stop-loss) at 8. The market is strong and pushes you all the way up to 13. Most new traders then have their heads full of target prices like 15 or 20. They may even already be planning to spend their profits, but their stop-loss defense is still at 8.
That’s where the risk gets buried. When the market flips, the price drops from 13 to 11, and your mindset collapses instantly. You start thinking: I didn’t sell when I was up 3, so if I sell now wouldn’t I just be turning profit into nothing? So you choose to stubbornly hold. When it falls back to your 10-cost line, you’re still hoping it will bounce back. But once it breaks directly below 8, in the end you can only cut your losses and exit reluctantly.
So how would someone who knows how to trade handle it? When the price rises to 13, they would move the defense level up to 11—at the very least, back up to their 10-cost break-even line.
That’s what “zero-cost” positioning is.#BTC