Crypto friend asks: For example, if ETH pulls back to 3966, 3936, 3912, each receiving 7%, totaling 21%, if it falls below 3900, reducing the position by 10%, is it equivalent to reducing the position to 11%?

This question is representative, but the understanding is incorrect.

The plan to open a position of 21% means preparing to open a position that accounts for 21% of the account funds.

Reducing the position by 10% when it falls below the defensive point means reducing the already opened position by 10%. For example, if the margin is 1000, then reduce by 100.

If it’s hard to understand, just consider the margin of your current position for defensive reduction, which makes it much easier to comprehend.

For instance, this morning there was a strong rebound, and if ETH started to pull back from 4024, then the support points for the pullback are 3988, 3966, 3936, and 3912. These are the recent minor support points below 4k, none of which are strong supports, but a strong market pullback here will gain support, so low buying should target these points. 3988 is the closest to the market price, so it can be ignored. For 3966, 3936, and 3912, enter in batches; if the total position plan for each point is 7%, that’s 21% in total. In reality, the lowest pullback reached around 3927, meaning the positions at 3966 and 3936 were acquired, with an average price of 3951, and a position size of 14%. If there’s no real-time monitoring, then at this moment, the position is 14%, with an opening cost of 3951, while the market price is 3966, which has already rebounded to the first low buying point and is already in profit. Now, looking at the 30-minute Bollinger middle band, it has already provided support, so the 7% bullets for 3912 were not utilized, and one can directly add at the current price, changing the position to 21%. Then, set profit-taking orders in batches above 4012. When the price breaks through 4060-4088 again, if it pulls back, 3966 may not be achievable without some slight bearish information to stimulate the pullback.

The real support level below 4k is 3880, 3828, and during strong bullish periods, it won’t pull back to 3880, so today’s low buying defense is simply 3880. If it can pull back here, it’s basically an entry opportunity; those with high forced liquidations can reduce the margin by 10%, and those without forced liquidations can directly continue to add positions. For positions that are already in profit, try not to wait for the profit to turn into a loss; when in profit, directly set a closing order near the cost, as this is the safest method. That's about it.