A small position means that the amount invested accounts for a small part of the total amount. The correct way to open positions is to open positions in batches. Try the position of small capital first, and try to increase the position when it rises.
It’s like a battlefield. A commander always needs to conduct reconnaissance first, and send a small force to test the actual situation, so as to judge whether the value is worth fighting for, and whether the odds are good. Only after a great victory will the follow-up troops be overwhelmed. A shrewd commander-in-chief always reserves reserves and rations, and a reckless general can win countless wars. However, there are no reserves in the entire army. Once a mistake is made, the entire army will be wiped out, and there will never be a day to turn over.
Therefore, positions can be divided into three points: pyramid position management method, funnel position management method, and rectangular position management method.
Pyramid position management method
Pyramid-shaped position management method, the initial investment capital is large, if the market rises, the proportion of gradually increasing positions will become smaller. Conversely, if the market falls, no more positions will be added. This is pyramid-shaped position management.
The pyramid-shaped position management can adjust the position according to the profit. When the profit is higher, the position is fuller. But when the market is volatile and sideways, incomes are lower.
Funnel-type storage management method
Funnel-type position management, that is, the initial entry of the capital ratio is smaller, and the position is lighter. Contrary to the position investment idea of the pyramid. If the market falls, investors will gradually increase their efforts to increase positions and dilute costs for the purpose of reducing costs. In this method, the position control is small at the bottom and large at the top. Therefore, it can be called the funnel warehouse management method.
The advantage of this approach is that the initial risk is relatively small, and the higher the funnel, the more profitable it is.
The shortcomings are obvious. The expectation of the future prospects of the market requires accurate judgment. If the judgment is wrong, it may not be profitable. Compared with pyramid position management, this method of holding positions has higher requirements on the level of operators, and the risk of liquidation is also higher.
Rectangular warehouse management method
This method is that when opening a position for the first time, the funds entering the market account for a fixed proportion of the total amount of funds. If the market develops in the opposite direction, it will gradually become an increase in positions to reduce costs. The increase in positions will follow this fixed ratio, which can be called the rectangular position management method.
This method of operation also requires a higher level of operators. If the prospect prediction is accurate, it will obtain huge profits.
The disadvantage is that the average cost rises rapidly in the initial stage, traders are prone to fall into a passive situation, the price cannot cross the break-even point, and they are in a quilt situation. After reaching a certain position size, a slight change in the price in the opposite direction will lead to liquidation.
