Position management refers to a specific set of plans for opening, increasing, reducing and clearing positions when you decide to trade cryptocurrencies.

One of the most important reasons why many traders fail is that they regard market analysis as the whole of trading, as if victory or defeat can be determined by simply analyzing the market.

In fact, the market is just the most basic work. What really determines the victory or defeat is the work after the market analysis, that is, the issues you consider after entering the market.

Position management includes fund management and risk control. The word "position" should not be understood to indicate any meaning. Position is more about when to add positions, how much to add, where to reduce positions, and how much to reduce.

That is, it is a roadmap of "entering the market, increasing positions, reducing positions, and exiting the market."

The complete transaction process should be:

1. Market analysis, you can use any technical analysis.

2. Position management. After entering the market, you need to consider what may happen next. What to do with the profit? Should you add to your position, or exit the market with full profit, or continue to hold? What to do if the profit expands again?

What should I do if I lose money? Should I stop loss, hold the order, or exit partially first? How big a loss should I make before exiting completely? Position management will consider both risk and return factors.

3. Strictly execute transactions. When you have a clear plan in mind, you should start implementing it and do not let market fluctuations disrupt your thinking.

4. Summarize the transaction. After a transaction is completed, it is necessary to review the transactions in the previous period. The review samples should cover the three market states of rising, falling and volatile.

Then, on this basis, we will improve and optimize the market analysis, position management, and transaction execution process. We must first find the entry point based on our own trading skills. This position must be a support line.

When the market is above the support line, the trend is up, and when the market falls below the support line, the trend is down;

More importantly, the support line is also the basis for us to define potential risks. When the stop loss is placed below this support line, the potential risk range is determined. If the initial stop loss area below the support line is touched, you should exit the market first or close most of your positions first and then gradually reduce your positions as the price continues to fall until all positions are closed.

The potential profit range is above the support line. The upward trend of the market has not ended, so the potential profit is theoretically unlimited.

If the price goes up after entering the market, we can hold the original position and wait for it to rise, or gradually increase the position based on the original position. We will move the stop loss according to the development and changes of the market.

When the market moves as we expected, we should move the stop loss to a position closer to the cost price or below the support line with a certain margin. Moving the stop loss means constantly reducing the risk margin in the market, which is equivalent to locking in floating profits.