Beginner's Position Management Method in the Crypto Space

⭐ If you are a gambling dog, love all-in bets, enjoy big swings, seek excitement, and crave quick gratification, you probably won't consider position management;
⭐ If you are burdened with debt, constantly harassed by online loans, you likely lack the patience to learn position management. All you care about is the belief and illusion of getting rich overnight.
⭐ If you are a seasoned veteran, having truly lost money, been hurt by the market, and experienced multiple liquidations, you probably already have your own awareness and experience in position management.
⭐ Most people who die in this market are not because of strategy failure or poor technology, but because of mistakes in position management, such as heavy positions leading to liquidation, or over-leveraging and liquidation.
🤡 They will say: Be cautious, how can you make big money?
🤡 They will say: Human nature, I can't control it, it's impossible!
🤡 They will say: I'm a gambling dog, don't talk to me about stability!
🤡 They will say: I have little capital, no unlimited margin, not over-leveraged, when will I turn things around?
🤡 They will say: Gambling isn't so complicated, just go all-in, either make a killing or get liquidated, isn't it just speculation? Otherwise, what's the point of this market? Just stick to traditional, stable investments!
These types of people, don't waste time on position management. Wealth will be redistributed in this market according to your cognition and understanding.
🌞 Let's get straight to the point. The beginner's position management method in the crypto space is also suitable for seasoned veterans who have been through many battles, and for old gambling dogs who still haven't changed and want to turn back.
🔥 Abandon the subjective idea of high leverage = high risk
Many beginners, even seasoned veterans, haven't clearly understood the difference between high and low leverage, or they are all afraid of high leverage, thinking it's the root of evil and the source of liquidation. Many influencers also just tell you not to use high leverage, ignoring the fact that liquidations and losses are actually directly related to your position size, not leverage itself. High leverage doesn't make you prone to liquidation; your position size does. So, whether you get liquidated depends solely on your position size. Understand this basic logic: even with maximum leverage, you simply open a position.
🔥 Abandon the habit of opening trades based on percentages
People who equate high leverage with high risk, favor opening positions based on a percentage of their margin, or don't know how many coins they've opened, only to find their liquidation price is very close afterward. Be more precise—manage your positions carefully by manually inputting the quantity of coins you open, rather than blindly opening trades based on U.S. dollars. You are not an infinite margin whale; don't act so carefree and open trades impulsively.
🔥 Learn to build positions in batches + take profits in parts (spot + futures)
In crypto investing, proper position management is key to controlling risk and increasing returns. Here are three mainstream methods with their operational points:
1. Rectangular Position Management (Suitable for ranging markets)
Logic: Divide your funds into 3-5 parts (e.g., 100,000 USDT split into 5 parts of 20,000 USDT each), and open positions with a fixed amount each time. If you prefer more detail, you can split into 8 or 10 parts. Don’t fear the hassle. The most important thing is to survive with minimal risk.
Advantages: Cost averaging, suitable for uncertain, sideways markets.
2. Funnel Position Management (Bottom-fishing strategy)
Logic: Start with a small position (10%), and increase the position as the price drops (15% → 20% → 25% → 30%).
Applicable scenario: Predicting a long-term decline bottom. For example, Ethereum falling from 4000 USDT to 2000 USDT, you can build positions in batches at 10%-30%, averaging a lower entry price.
Risk warning: Reserve enough funds to avoid exhausting your bullets too early.
3. Pyramid Position Management (Trend-following strategy)
Logic: Start with a heavy position (50%), and reduce or add as the price rises (30% → 20%). This method is less common, suitable for trending markets where you add to positions as the trend proves correct.
Batch take profits—don’t rigidly wait for exact target levels, or get stuck if the price hits your precise take-profit point and then reverses. Always keep the habit of locking in profits gradually, close to your target levels, rather than expecting to always hit the exact point. The goal is to achieve an average take-profit price!
🔥 Reduce your margin utilization to a safe threshold
After opening a position, keep your margin utilization below 3%-5%. Of course, if you are heavily leveraged with stop-losses, you can choose to gamble. Different strategies lead to different stability levels. For conservative traders, don’t expect quick high returns.
🔥 In full position mode, avoid holding more than 3 simultaneous positions
Besides isolated margin accounts, opening multiple targets on a full account means your liquidation price will fluctuate. In extreme market conditions, even initially safe liquidation prices can approach your entry point as floating losses grow, leading to liquidation. Last year was 8.5, this year 2.3—many confident traders died this way. Moreover, some keep adding positions without margin top-ups, eventually going to zero.
🔥 Your initial position shouldn’t have a liquidation price (for longs)
Having no liquidation price allows peace of mind. Even if you add to your position later, you still have enough room. Some say only infinite margin has no liquidation price—that’s naive. If your position size relative to your margin is small enough, you can consider it relatively “infinite margin.”
For long positions, you can input your position size at entry to estimate the forced liquidation price, testing the maximum position size without liquidation.
For longs, the formula:
《Maximum position size without liquidation》 = Your total contract margin ÷ leverage ÷ ( margin required for opening 100 coins × 100
This is the maximum number of coins you can open without risking liquidation.
For shorts, there is always a liquidation price, so always set a proper stop-loss—don’t be reckless!
🔥 Learn to open positions based on coin quantity, not just USDT amount
For position management, this is a good habit. Experience will tell you. If you like opening trades based on percentage or margin size, you might not know how many coins you actually hold. It’s better to switch your display to show coin count instead of just USDT value. Looking at USDT might numb your sense of risk and lead you to over-leverage unknowingly.
🔥 For floating profits, set break-even stop-loss or trailing stop-loss. Never let floating profits turn into floating losses.
In short-term trading or swing trading, don’t be greedy or use tricks. The most conservative approach is to act according to the situation: when the trend is correct, quickly set a break-even or trailing stop-loss to lock in profits. Don’t let floating profits turn into losses. For long-term hold positions, ignore short-term fluctuations; floating gains and losses are insignificant in the big picture.
🔥 Find ways to eliminate human nature from trading
Are human traits like greed, fear, stubbornness, desire for revenge, or being repeatedly tormented by a coin really hard to abandon? Actually, it’s not. It’s just that you’re not strict enough with yourself. Controlling human nature is a form of cultivation—if you can’t do it, let’s chat more openly in live sessions.
🔥 Set stop-loss intelligently, avoid unnecessary losses
Arbitrary narrow stop-losses above resistance or below support often give money to the market and waste your capital. Repeatedly doing this is foolish. Each coin has its own character; stop-loss strategies should vary. Some require wider stops, some can be narrow. If you’re in a long position at a major support level, and the decline is predictable, you might not need a stop-loss temporarily. Adjust stop-loss width based on your position size and risk appetite.
🔥 Don’t open positions too densely; position size must be reasonable. Ineffective averaging occurs when you open additional positions without proper spacing.
Don’t open new positions recklessly. If your initial position is light and you go against the trend, you risk pulling your average price up. If you can’t resist adding when prices dip, your position quickly becomes heavy. When the market drops sharply afterward, you’ll find no room to add more, and your average price will be stuck because of the heavy position.
Always add positions with spacing, preferably near support and resistance levels. Adjust your addition ratio accordingly. Once all positions are open, you get an average entry price, which you can use to set take-profit and stop-loss levels. When market oscillations are frequent, learn to add or reduce positions dynamically to optimize your average entry price.
Don’t see adding positions as troublesome; safety and profit come from proper operation, not just passively waiting.
🔥 When recovering from a big loss, know when to exit and withdraw. Opening a position with poor entry points and already being close to your breakeven is hard enough. Don’t expect to chase more after breaking even.
If you’ve held your position for a long time and finally recovered, it’s a sign of market mercy. Be grateful for the chance to escape, and remember your initial entry was poor. Safety first—consider setting a break-even stop-loss or taking profits and then re-entering at better levels. Don’t hold onto floating profits hoping for bigger gains; this often leads to losing everything.
Everyone needs to develop their own position management experience. The above is personal advice; it’s not suitable for everyone. If you want to survive long-term in this market, take position management seriously as a top priority.
To be continued, more updates coming~~~~~~~