Essential Position Management Strategies in the Crypto World

In crypto world trading, scientific position management is the core guarantee of profitability. The following eight major strategies help you avoid risks and lock in profits.
The golden ratio method is the basis of capital protection. Divide the total capital into five equal parts, using only 1/5 of the position for each entry, which can control the single stop-loss risk to 2% (10% stop-loss × 1/5 position). Even if there are five consecutive stop-losses, the total loss would only be 10%. Set the profit target at above 50%. For example, with a principal of 100,000 yuan, if you enter with 20,000 yuan, you would lose 2,000 yuan on a stop-loss and gain 10,000 yuan on a profit, resulting in a profit-loss ratio of 5:1, thus building positive returns through "small losses and large gains."
Trend judgment is the key to profit. "Trend is king" is an iron rule in the crypto world: in a downtrend, rebounds are mostly traps to lure buyers; in an uptrend, pullbacks are great opportunities to increase positions. For example, during the Bitcoin bull market in 2023, entering the market during fluctuations and pullbacks had a success rate 67% higher than blindly catching the bottom.
Be cautious of coins that experience a short-term surge. Coins that increase by over 50% within 72 hours have a 95% probability of retracing all gains within two weeks. They are often driven by speculative trading and lack fundamental support, leading to inevitable price collapse once the hype fades.
The "Zero Axis Crossover Rule" of the MACD indicator is considered a powerful tool: when the DIF and DEA form a golden cross below the zero axis and break through it, it is a signal to enter the market from bearish to bullish; a death cross formed above the zero axis requires a reduction in position. In the Bitcoin trend of April 2024, this strategy successfully captured an 18% upward wave.
Retail investors often fall into the trap of averaging down, which can easily turn a 10% loss into a 50% loss. The correct approach is to "increase positions on profits and cut losses on losses": when profits reach 20%, use the profit to build positions again, which not only amplifies gains but also protects the principal.
Trading volume is a trend "thermometer." A breakout on low volume is a signal to start, while high volume stagnation at a peak (such as at the top of a popular coin in June 2024) serves as a warning to exit. Combined with "high volume high price, low volume low price," it can identify turning points.
Multi-period moving average builds trend matrix: the 3-day moving average rises to capture ultra-short positions, the 30-day moving average turns to hold mid-term segments, the 84-day moving average lifts to lock in the main upward wave, and the 120-day moving average moves to layout long-term positions.
Daily "three-dimensional review" is required: logical review to examine the fundamental changes of the held position coins, technical review to check if the weekly K-line patterns meet the standards, and emotional review to assess whether decisions are influenced by market emotions.