A brief discussion on the "10U God of War" phenomenon: problems and solutions
In currency market trading, there is a type of person called the "10U God of War". They frequently go against bulls and buy altcoins, but each time their positions are very small. This method of operation has obvious problems in position management and trading strategies.
Problems with the 10U God of War phenomenon
Lack of confidence: Choosing to reduce the position to spread the risk actually exposes the uncertainty about this transaction. If you don't have enough confidence in your decision-making, it may indicate a lack of understanding of the market or the currency of your choice.
Insufficient grasp of buying and selling points: The lack of clear trading plans and strategies leads to insufficient grasp of buying and selling points. This increases the risk of being stuck, further fueling anxiety.
Lack of tape reading skills and mentality: the two are interrelated. Inadequate market reading ability may result in the inability to accurately judge market trends during trading; and the lack of a good trading mentality may easily be affected by emotions in decision-making.
Correct position management strategy
There are two main types of position management: pyramid and funnel.
Funnel-type position management: Represented by Livermore, he advocated using a small portion of funds to test positions first. Once the direction is correct, the position will be gradually increased. If the market trend continues to be in line with expectations, large-scale stud operations may even be carried out. This strategy requires deep market understanding and confidence.
Pyramid position management: Represented by Albrooks, it is advocated to give a larger position at the beginning in a transaction with high confidence. As the market develops, you can perform band operations by reducing positions and ultimately reduce costs. This strategy requires very precise judgment and execution.
preventive solution
Enhance the ability to read the market: This is the basis of all trading strategies. Improve market sensitivity and judgment through in-depth analysis of market dynamics, technical indicators and news events.
Develop a good mentality: Trading is not just about technology, but also a battle of mentality. Staying calm and not being easily swayed by emotions is the key to making the right decision.
Develop and execute a trading plan: A clear trading plan can help you better grasp your buying and selling points. Once a plan is formulated, it must be resolutely implemented and continuously optimized and adjusted in actual operations.
Reasonable stop loss and take profit: Setting a reasonable stop loss point can control risks, while take profit can help you lock in profits. Both of these are important means to achieve stable returns.
