Why is pin prevention crucial?
1. Set a stop-loss defense
The primary strategy is to establish clear stop-loss points. This can effectively limit losses and prevent them from expanding indefinitely when the market experiences adverse changes. The setting of stop-loss points should be flexibly adjusted based on individual risk tolerance and market volatility.
2. Beware of the traps of low-leverage contracts
Although low-leverage contracts may seem safe in most cases, market makers often manipulate high-leverage positions, while low-leverage contracts can become a trap of boiling the frog. Once the market experiences severe fluctuations, low-leverage contracts can also suffer significant damage. Therefore, one should remain vigilant with low-leverage contracts and avoid blindly following trends.
3. Build multi-level position management
Whether choosing full position or incremental trading, a multi-level position management system should be established. By diversifying positions, one can reduce the risk exposure of a single contract and enhance overall risk resistance. It is recommended to maintain at least 2-3 levels of position allocation to cope with market uncertainties.
4. Make good use of take-profit and stop-loss tools
Using take-profit and stop-loss tools for opening positions allows for the setting of trigger and transaction prices, effectively avoiding pin risks. For example, when a pin market occurs, the trigger price can be set at a safer level to avoid direct transactions at extreme prices. At the same time, there should be a certain distance maintained between the transaction price and the trigger price to cope with market fluctuations. Additionally, trigger and transaction prices should avoid being set in areas of high trading volume to prevent unexpected openings during the pin's upward and downward pull.
5. Set take-profit and stop-loss for high-leverage contracts
When opening a position, one can set a take-profit and stop-loss for high-leverage contracts at 5%-10% of the position as part of risk management. The trigger and transaction prices for such contracts should be set at relatively safe levels to cope with extreme market situations. Additionally, the transaction price should not be too close to the trigger price to prevent easy triggering during fluctuations.
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