Why can't we go all-in?
Going all-in sounds great, but in reality, the risks are tremendous.
Risk off the charts: A single misstep can lead to lasting regret.
Going all-in means putting all your eggs in one basket. If the market turns against you, your account could suffer severe losses or even be wiped out entirely. In trading, no one can guarantee 100% accuracy; going all-in means ignoring risk.
Difficult to recover from consecutive losses: If you lose, you have no bullets left.
In trading, wins and losses are part of the game. Even high-win-rate strategies can have losing streaks. If you go all-in and lose, your capital is destroyed, and you won't have money left for the next trade. If you manage your position well, at least you'll have a chance to recover.
Market fluctuations are hard to predict: Black swan events can happen at any time.
Who can say for sure about the market? Black swan events, such as insufficient liquidity or price gaps, can end everything in an instant if you're all-in. Normal fluctuations could also trigger your stop loss; going all-in amplifies risk.
Enormous psychological pressure: Your judgment can become skewed.
When trading all-in, your emotions fluctuate with the price, making you impulsive. Fear of loss may prevent you from stopping loss, turning small losses into big ones; overconfidence can lead you to miss good opportunities. Keeping your position lighter helps maintain a stable mindset, allowing for better judgment.
Long-term profitability relies on stability: Going all-in is not a long-term strategy.
Trading is a game of probabilities. No matter how high your strategy's win rate is, one all-in mistake can nullify all previous profits. Long-term profitability comes from small losses and big gains, not from going all-in. The Kelly Criterion states that the optimal position size is not full allocation; it should consider your risk tolerance.
Inflexible capital management: Going all-in leaves no backup plan.
Once you're all-in, you won't have money to invest in good opportunities that may arise later, and if you lose, you can't reduce your position to hedge against risks. By managing your positions well, you can trade flexibly.
How to control your position?
Control risk: For each trade, keep the risk below 10% of your account capital, so that even after a few losses, you still have capital to continue.
Build positions in batches: Buying and selling in batches reduces the impact of price fluctuations.
Adjust dynamically: Adjust your position based on how the market changes, but don't go all-in.
Set stop losses: For each trade, clearly define your stop loss point to keep risk under control.
In the upcoming layout direction, I will guide everyone to target lucrative opportunities in counterfeit projects, especially those with significant potential. An expected return of over 10 times is definitely achievable. If you want to make big money in a bull market, like and comment, and I'll help you strategize for the entire bull market.