Newcomers are most likely to fall into these traps when entering the market

Have you experienced this too? Holding 1000 USDT as your principal, going all-in at once, only to be liquidated by the third day. Or finally catching a coin that doubles, but the position is so small that the profit isn't even enough for a barbecue. Behind these blood and tears lessons, there is actually one core issue—poor position management.

Today, I will break down three ironclad rules for you: a maximum of 10% per position, maintaining at least 30% reserve funds, and layered position scaling.

10% is a life-and-death line, not a suggestion

For example, if you have 100,000 USDT in your account and you like a certain coin, your position limit is 10,000. Sounds small? Recalculate and you'll understand: even if this 10,000 goes to zero, you still have 90,000 to operate with, always having a chance to turn things around. Experienced traders do the opposite—they first calculate the maximum loss as a percentage of your total funds (e.g., 2%), then work backwards based on your stop-loss level to determine how large your position can be. Set your loss limit first, then plan your profit potential. This is the key difference between professional traders and retail investors.

30% reserve funds, your survival guarantee

This money serves two critical purposes:

1. During market panic sell-offs to key support levels, having cash on hand allows you to buy the dip aggressively. While others panic and cut losses, you can seize the opportunity to accumulate.

2. When new sectors or leading coins take off, you won't miss out due to lack of liquidity. Those without reserve funds can only watch others profit from the sidelines.

Layered position scaling, controlling costs is the key

First entry phase (20%-30% of position): Lightly test at a critical point when the trend is just beginning. This is using a small amount of capital to verify whether your judgment is reliable, and even if you lose, it's controllable. Once you start making profits, it indicates the direction might be correct, laying the foundation for subsequent scaling.

Second entry phase (30%-40% of position): When the trend is confirmed, and the price is higher than your initial buy-in but the upward momentum is more decisive, you can increase your position. This allows your cost basis to enter a more favorable zone.

Third entry phase (remaining funds): When the trend enters a main rally phase, most people chase the high, but you should cautiously deploy your final capital. Each additional buy should be smaller than the last, forming a "positive pyramid" shape, ensuring your average holding cost remains advantageous and you won't be caught holding a high position at the peak.

The two most common fatal mistakes

1. Regretting buying too little when prices rise, driven by FOMO, going all-in, and ending up being trapped at the top. This is a classic chase-high mistake.

2. When prices fall, trying to average down endlessly, constantly adding to the position, ultimately turning a small, manageable loss into an insurmountable big hole. This is a despairing operation after being caught.

All these are lessons learned from practical experience. Position management sounds simple but tests human nature in execution. Those who can stick to these three rules will at least avoid liquidation due to poor position management.