The secret of position management for small players in playing with coins #美联储回购协议计划

To be honest, the failure of many small capital traders is not primarily due to their inability to predict the market, but rather because they did not manage their position well. In the end, an account blows up, and eight out of ten times, it is because of poor position management.

**Why is Position so important?**

For small capital, position management directly determines how long you can survive. The principal is the foundation of everything - you need money to trade, this is obvious, but how many people just haven't figured it out. Maintaining the scale of the principal is essential for truly achieving long-term stable trading.

**Iron Rules of Trading**

1. Capital preservation first - the principal is the lifeline.

2. Mindset is the essence of trading - trading is a contest of mindset. Once the mindset shatters, all technical analysis is useless.

3. Seize the opportunity - Trading is about placing bets at the right time.

4. Compound interest is the key to wealth - with good risk control, the power of compound interest can turn a small account into a large account.

5. Repeat Execution - Find effective strategies and use them repeatedly to make money

**Four Ways of Position Management**

**Equal Position**
The simplest and most straightforward. Divide the funds into 4 or 5 parts for quick mental calculations. Invest one part each time, clear and understandable.

**Fixed Risk Ratio**
Common rule in the circle: The loss of a single transaction should not exceed 2% of the total capital. Based on this ratio, decide how much Position to take each time. If you have 10,000, the maximum loss per transaction is 200. This way, even if you lose 50 times in a row, the account won't die. $BTC is particularly suitable for this kind of large coin.

**Pyramid Positioning**
Can be used during trend markets. Build positions in batches after the market starts, with smaller position sizes as it goes up. This way, you can benefit from trend profits without being kicked down by a pullback.

**Balanced Position Method**
Divided into three parts: bottom position (core position), rolling position (swing operation), and reserve funds (opportunity funds). Never go fully invested, always leave some room.

**Key Points in Practice**

**Funds must be concentrated**

Less than hundreds of thousands is considered small capital. Small investors should avoid diversification. Instead of spreading your investment across 5 coins, it's better to thoroughly understand 1 to 3 targets.

Why? Because after diversification, the contribution of a single profit to the total capital is too small, making trading meaningless. Small funds should do subtraction, putting eggs in fewer baskets and going in heavily. This is the correct way for small funds to turn the tables.

**Learn to go empty**

Holding a position is also part of position management. If the market is unclear and opportunities haven't appeared, staying out is the best choice. If you feel restless and start making random trades, that's the quickest way to lose money. Not trading can actually help avoid unnecessary losses.

**Regular Pump Review**

Every week, you should review your trading records, especially the position management part. Check where you faced headwinds and where you had tailwinds. Only by reviewing can you internalize the lessons into your discipline for next time.

**Technical Coordination and Mindset**

Good trading skills can only truly take effect when paired with a good mindset. The stability of the mindset is directly affected by the size of the position. The larger the position, the more intense the fluctuations in mindset, making it easier to make erroneous decisions.

**Final Words**

Position represents risk. Poor position management is like a slow suicide. Those traders who have lived long have long ingrained position management into their bones, making it an unconscious habit. This is true professionalism.