Today is the weekend and the U.S. stock market is closed. BTC spot ETFs are not trading either. European and American traders are on vacation. While the market volatility is relatively small, let’s talk about the application teaching of pyramid-style position increase in BTC trading in the crypto market.

After being in the market for a long time, people may realize the risks of all-in, and entering the market in batches has become a generally accepted principle. The pyramid-style position increase, also known as the progressive strategy, is the practical application of this principle.

Suppose you buy at point A, and you just catch the bottom. Then the market rises to point B. You think the upward trend has just started, and there is no reason to rush to arbitrage. You add a second soldier to buy at point B to chase the victory. The market rises to point C, and you think it is just the middle point of a big rising wave. Then you add a third soldier to expand the victory and stop when it is close to the top of the wave. Therefore, the progressive strategy can also be called the trend of increasing.

To correctly apply the progressive strategy, there are three key points to note:

First, you should increase your bet when you are making money. This is because increasing your bet when you are making money is in line with the market trend and can drive profit growth. For example, if the price continues to rise after buying, continue to buy, or if the price continues to fall after selling, continue to sell. This can expand the results and achieve a big win. However, if you increase your bet when you are losing money, it is a counter-market operation, which will make you sink deeper and deeper into mistakes. Therefore, experienced traders are determined to increase their bets, but only increase their bets when they are profitable, not when they are losing money.

Secondly, you cannot add positions near similar prices. For example, if you short a BTC contract at $70,000, you should wait until the price drops to $68,000 before shorting the second contract, and then short the third contract when it drops below $65,000. If you sell the first contract at $70,000, and then short the second contract at $69,500 when the price does not fluctuate much, and then short the third contract at $69,000, the prices are similar, which is equivalent to throwing everything at the wall. Once the price rebounds to $71,000, you will be in trouble.

Finally, do not use the inverted pyramid method. When preparing to implement a progressive strategy, capital allocation is critical. The second purchase should be less than the first, and the third purchase should be less than the second. In this way, the average price of the three purchases will be more favorable. On the contrary, if each increase is more than the previous one, the average price will be higher and higher when doing longs; the average price will be lower and lower when doing shorts. The original floating profit may be swallowed up by the slightest fluctuation in the market, and it will turn from making money to losing money. This is a very unwise approach.

Entering the market in batches is the correct principle, but only with the right strategy can good results be achieved. Only by doing the above three points can the progressive tactics work, otherwise it may be counterproductive. It should be noted that the crypto market fluctuates violently and the risks are extremely high. The above teaching is for reference only, and everyone should make decisions carefully.