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In the Crypto Assets market, many Newbie traders often fall into a dangerous trap: they hesitate to hold when trading with the trend, but stubbornly cling to their positions when trading against it. This behavior pattern not only violates basic trading principles but can also lead to serious financial losses. This article will introduce you to how to change this harmful habit and improve your trading skills.
First, we need to clarify a key concept: the essential difference between trend trading and counter-trend trading does not lie in the entry timing, but in the risk management strategy. Trend trading emphasizes "cut losses, let profits run," allowing profits to grow continuously; whereas counter-trend trading often falls into the dilemma of "taking profits, not cutting losses," ultimately leading to significant losses.
To avoid this situation, here are three practical strategies:
1. Pre-set stop loss: Before starting the trade, you need to clearly set a stop loss point. This stop loss point is your bottom line; once reached, it must be firmly executed without giving yourself any excuses. This discipline is crucial for controlling risk.
2. Reasonable Position Allocation: Calculate the appropriate position size based on the stop-loss level you can tolerate. Avoid entering the market with your entire position or increasing your position against the trend, as this can easily lead to significant losses during market fluctuations.
3. Capital Preservation Stop Loss Strategy: When the trade starts to be profitable, move the stop loss point to the cost price position. This approach ensures the safety of the principal, and the rest is pure profit. This psychological shift can help you hold profitable positions more calmly.
In addition, there is an advanced technique worth mentioning: trailing stop loss. When your trade is in profit, you can set a retracement allowance, for example, allowing a 5% retracement in a 20% profit. This way, you won't exit a strong trend too early, while effectively protecting the profits you have already gained.
Remember, the crypto assets market is never short of opportunities; what is truly scarce is the discipline to maintain profits. By strictly implementing these strategies—setting stop-loss orders, reasonable position allocation, breakeven stop-loss, and then trailing stop-loss—you will be able to better grasp market trends and avoid the risk of liquidation caused by stubbornly "holding on".
In Crypto Assets trading, success requires not only insight but also strict self-management and risk control. By practicing these strategies, you will gradually improve your trading skills and achieve better returns in this market full of opportunities and challenges.