1. Position management is a very important thing in cryptocurrency investment, especially when the market is not good, position management becomes particularly important?
2. The position is the ratio of the funds actually used to purchase coins to the funds used for investment.
For example, if you have $100,000 for investment, and now use $30,000 of it to buy coins, then the position is 30%.
If the position is large, once the price of the currency rises, excess returns can be obtained; but if the price of the currency drops sharply, the loss will be heavy and miserable. If the position is too small, once the price of the currency rises, you will be very upset that you did not buy a large amount at that time; if the price of the currency drops sharply, you will feel very fortunate. How can we avoid these phenomena?
What kind of position is considered reasonable?
1. Determine the position according to the funds. Generally speaking, no matter how big or small the funds are, there is a problem of position control. But in comparison, investors with large funds should especially treat position control as a top priority. In general, investors with large funds should try not to hold a large position, especially a full position, at least not a full position for a long time. Investors with limited funds can hold a large position appropriately within the loss they can bear.
2. Determine the position based on the price. When determining the size of the position, another important basis for judgment is the price of BTC. Generally speaking, when BTC has risen significantly and is at a relatively high level, you should reduce your position and lighten your position. The higher it goes, the lower your position should be. When BTC is at a relatively low level, you should increase your position and increase your position. The more it falls, the heavier your position can be. "Don't sell if it doesn't rise, sell a little if it rises slightly, and sell a lot if it rises a lot; don't buy if it doesn't fall, buy a little if it falls a little, and buy a lot if it falls a lot" is about this principle.
3. Specifically for individual coins, if there is no change in the fundamentals, we should adopt the strategy of light positions at high levels, heavy positions at low levels, selling more as the price rises, and buying more as the price falls, instead of following the crowd and frequently following the market sentiment FOMO to chase rising and falling prices.
What is certain is that if the position is well controlled, not only can the operation be done freely and easily, but the mood will also become very pleasant. Why are there always some people who can remain calm when the market goes up or down? Being good at controlling the position is probably one of the important reasons why they are so confident!
Here are some common methods of position management when buying:
1. Oversold stocks, batch warehouses and average price reduction tactics
This type of method is mainly suitable for aggressive investors who are keen on bottom fishing. They have a relatively small initial entry amount and a light position. When they buy coins, the price does not rise but continues to fall. They gradually increase their positions in the future, and the proportion of increased positions becomes larger and larger, thereby diluting the cost.
The key support level at the bottom is used as the boundary, such as the recent JUP
The 0.55 given is the key bottom support level. If it falls below, it means it is oversold. The entry points in batches are 0.43/0.45/0.47. This is because Brother Sao takes the average coin price of oversold 20% as an example;
A 20% drop from 0.55 is exactly 0.44, so a layout of 0.43/0.45/0.47 with an oversold range of 15-25% is given. If an oversold spike occurs, you will definitely be able to buy it at a low price!
2. One-sided rise and increase of positions to expand profit strategy
This type of method is mainly suitable for investors who follow up the market as soon as it starts. Divide the amount of funds prepared to enter the market into equal parts in advance. I often divide the position into 5 parts and add to the position by 1 part each time. The initial amount of funds entering the market accounts for a fixed proportion of the total funds. As the currency price continues to rise, opportunities will arise later and I will add to the position according to this fixed proportion.
This method is to seize the opportunity to add positions at each wave of the neckline after the unilateral upward trend comes out! This will help expand the victory! I will stop at most when I add 3 shares, so that I can keep 2 shares for flexibility, which will be safer!
3. Pyramid Position Management
This type of method is mainly suitable for conservative investors, who usually open positions when the market starts to fall for the first time. The initial amount of funds entering the market is relatively large, such as 40% to 50% of the position. If the market moves in the opposite direction in the future, no more positions will be added. If the direction is the same, positions will be gradually added, and the proportion of adding positions will become smaller and smaller.
It is important to note that if the price fails to stop falling after the initial position is established and instead breaks down, you should no longer add to your position and be prepared to stop loss and exit.
A few words about position management, short-term, mid-term, and long-term understanding! Be sure to read it!
Saoge focuses on mid- to long-term excess profits! This mid- to long-term is defined as follows:
1. Midline
1. When the profit reaches 15%, you should start to reduce your position. This has nothing to do with the time period. Sell while the price is rising until the principal + at least half of the profit is shipped, and the remaining position is all profit, then you can hold it for a long time.
2. For the mid-term, the forecast is usually 15-30 days. If the trend is good, it can be 60 days. However, there must be a reduction condition in the middle, which is 1. If condition 1 is met, you should reduce your position. Don't ride the roller coaster frequently.
2. Long-term
1. This is calculated on an annual basis. Sao Ge will invest in a fixed investment portfolio and automatically buy the fixed investment portfolio he likes at a regular monthly fixed amount. This can ignore any price fluctuations and last for 25 years!
2. Long-term, I don’t know how to operate manually. Anyone who operates manually all the time will definitely not get long-term
3. Short-term
1. It is the daily pork trotter rice. The pancake point reference in this daily analysis belongs to the free profit-taking and running after making a few hundred dollars. It is neither a mid-term nor a long-term operation.
2. You can run in the short term of three to five points. It may take a dozen minutes at the fastest, or a whole ultra-short cycle within the day at the slowest. You must run after completing it. It will definitely not stay overnight!
Position management:
1. Generally, 70% is allocated to long-term fixed investment, which can bring huge annual returns of 5-10 times!
2. The remaining 30% is used for rolling positions at 70% mid-term and 30% short-term!
3. Taking 10,000 dollars as an example, 7,000 dollars are allocated for long-term fixed investment, which is automatically invested every month; of the remaining 3,000 dollars, at least 2,100 dollars are used for medium-term rolling positions; and 900 dollars are used for intraday short-term investments!
Fourth, the mid-term position of $2,100. So the mid-term layout is usually a distribution of this $2,100. For example, 30% of the ETHFI is used, which means 630 dollars are used for playing. 310/310/310 can be divided into three parts for low-absorption layout! The remaining 1,470 dollars is used as an exciting oversold position and a sharp drop position!
5. For intraday short-term trading of $900, you won’t feel bad if you lose money, as the profit from the pork trotter rice can offset the day’s expenses. You can be a little willful, but you cannot mix long-term, medium-term, and short-term positions together!
The above is Sao Ge’s operational ideas on short, medium and long-term layout and position allocation!
It must be strictly implemented, and the profit and loss should be controlled. No matter how high or low it goes, you can attack or defend! Only in this way can you survive longer, accumulate little by little, and truly make steady progress and steadily gain profits!
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This is Sao Ge’s summary of positions over his more than ten years of financial career. I hope it will be helpful to you guys!
