How to get out of a trap and how to cover a position (technical teaching)
When should you cover a position? What should you pay attention to when covering a position
Take long positions as an example, because there are generally more people who open long positions
Use the EMA moving average as a reference to cover positions
There are several situations, first of all:
1. The price is above the EMA 5-day line, and the 5-day line is above the 10-day line, that is, from top to bottom, it is the 5-day, 10-day, and 30-day lines
(1) If the trap does not exceed 3 points, you do not need to cover the position. If it falls back to the 5-day line and does not fall below, it will rise again, and there is a chance to get out of the trap or make a profit.
(2) If it exceeds 3 points, you can add to your position at the 5-day line price to reduce the cost to close to the 5-day line, and the probability of profit is high.
Second situation: the price is between the 5-day line and the 10-day line, and the 5-day line is above the 10-day line
(1) If the price falls below the 5-day line and you do not stop loss immediately, if you continue to be optimistic about the future market, you can add to your position at the 10-day line to reduce the cost to below the 5-day line. If it rebounds and breaks through the 5-day line, hold the currency and wait for it to rise.
(2) If it falls below the 10-day line, if you continue to be optimistic and have the patience to hold the currency for the medium and long term, you can add to your position in batches after it is more than 5-10 points away from the 10-day line. Reduce the cost to below the 10-day line, wait for a pullback to the 10-day line, and sell the position to cover the position first
Third situation: The price is below the 5-day line and the 10-day line, and the 5-day line crosses or is about to cross the 10-day line
(1) If you are trapped and the 5-day line crosses the 10-day line, then when it falls to the 30-day line, you can cover the position near the lifeline to reduce the cost to below the 10-day line. If the pullback breaks through the 10-day line and the 5-day line crosses, you can continue to hold