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"How to Unwind Positions Complete and Refined Version"

How to unwind? First, understand how the position was formed and how it was taken on.

First: The wrong direction was chosen, chasing gains and cutting losses in the wrong way. When the price is near the upper band, reduce long positions to protect capital and raise the breakeven point; this is also the time to start trying to enter short positions. When a certain coin is stuck at a level where it can't move up, i.e., at a resistance level, attempt to open a short position. At this point, you should reduce long positions or exit, rather than chasing the rally. The opposite applies as well: killing a decline means reversing the previous approach. All these indicate a wrong direction.

Second: Poor position management. Position management is very important, second only to correct direction judgment.
If the initial position is heavily weighted, subsequent replenishments will be impossible, leading to increasing weight and ultimately only one result—liquidation.

The correct strategy should be: label the first entry with 1U, then enter lightly on the second entry, and use normal position size on the third entry; avoid heavy positions.
Heavy positions lead to an inability to add more, so ensure there is enough space above the current resistance level for adding positions.

Third reason: Greed.
Failing to take profits and reduce positions results in floating gains that are meaningless; unrealized profits are just illusions, and unrealized losses are just paper losses. The gains you see are just for show, not real.
After setting a breakeven stop-loss, the position remains profitable and won't turn into floating losses.

Fourth: Not strictly executing your trading strategy.
Failing to attempt entries when appropriate causes missed opportunities.
Entering with heavy positions when a light position is warranted, and chasing rallies or cutting losses impulsively—these factors combined lead to being trapped and unable to unwind temporarily.
Therefore, strictly following your trading plan can help avoid being trapped.

These four reasons stack up and lead to being stuck.

Summary:
1. Chasing gains and cutting losses in the wrong direction.
2. Poor position management: heavy initial position, no capacity to add later.
3. Greed: unrealized gains turn into floating losses, compounding the previous two errors.
4. Having a plan but not strictly executing your trading strategy.

How to unwind:
1. Exit near the entry price (exceeding or close to the entry price) or when slightly profitable (best solution).
2. When the direction was correct but due to reasons like not monitoring the market timely, you get trapped.
(1) For heavily weighted positions, refer to the first point: do not add more; if long and trapped, approach the next resistance level and strictly execute one operation—reduce position or just run away, admit the mistake, and treat it as a learning fee.
(2) For lightly weighted positions, there are two types:
- First, run near the resistance level repeatedly.
- Second, miss the opportunity to reduce at the current resistance, then add three times at the lower band to average down, and then exit slightly profitable near the entry price. Do not expect large profits afterward; greed is dangerous.

Special note: Profits can be left uncut to aim for better positions, but it is absolutely necessary to set a breakeven stop-loss. The goal is to avoid losses, not necessarily to make profits.

Based on analysis, what is the best solution to unwind?

1. For poorly positioned orders, slightly profit near the entry price (wait for the dip, which will happen) and close the position to regain freedom.
It’s also acceptable to not profit, just take a small loss to exit. Proper stop-loss is to protect the principal; capital preservation is more important than profit.
Actually, when opening a position, the first consideration is not how much you can earn, but how much loss you can accept. First, consider acceptable loss, then capital preservation, and finally profit. (Prioritize capital preservation over profit.)
Of course, the premise is to dare to try and make mistakes; without trying, there is no subsequent opportunity. No losses or profits.

2. Any lightly weighted position can be topped up at key levels with three times the initial size to average down, then slightly profit or reduce near the entry price, or just run away.

3. Not recommended but still an option: increase margin, average down at key levels, then repeat the optimal solution—run near the entry price.

Another point: there is never a perfect position, only relatively good ones. There is no best, only relatively good.
Dare to try lightly and make mistakes; only then can there be subsequent opportunities. Without trying, there is nothing.

4. Extreme case unwinding strategy: if about to be liquidated, what to do? Quickly lock the position to protect the principal.
Open a hedge in the opposite direction: open a position in the opposite direction with 50% of the margin of the original position, and set a breakeven stop-loss after profits to prevent floating losses and need to unwind again.