The crypto assets market is known for its high volatility, with price fluctuations of over 10% in a single day not uncommon. This characteristic brings both opportunities for quick profits and significant risks. Many investors suffer substantial losses due to improper position management, either losing heavily during severe market fluctuations due to heavy positions or missing important profit opportunities due to light positions.

To survive in this challenging market for the long term and achieve stable returns, mastering the art of Position management is crucial. Here are some key principles and strategies:

The primary principle is to protect the principal. The loss of a single trade should be strictly controlled within the range of 2%-4% of the principal. For example, with a principal of 100,000, the maximum loss for a single trade should not exceed 4,000. This ensures that there are still enough funds to continue operations in the event of adverse market conditions.

Secondly, it is essential to fully recognize the high fluctuation of the crypto assets market. Compared to the traditional stock market, the annualized volatility of crypto assets can be 2-3 times higher. Therefore, when formulating position strategies, a more conservative approach is needed, generally recommending a position that is about 30% lower than that of stock investments.

Position management should be dynamic. During a bull market, positions can be controlled between 50%-70%; whereas in a bear market, positions should be compressed to within 30%. Furthermore, for different types of crypto assets (such as mainstream coins, small-cap coins, leveraged trading, etc.), different position ratios are also required.

In practice, a "three-stage" fund allocation strategy can be adopted: divide the principal into three parts, with 10% used to test the market direction, 20% for adding positions in line with trends, and another 20% as reserve funds to cope with extreme market conditions.

It is also important to allocate positions based on the risk characteristics of different Crypto Assets. For example, 15%-25% of funds can be allocated to mainstream coins like Bitcoin or Ethereum, while for small-cap coins, the position for a single coin should not exceed 5%. For leveraged trading, it is recommended to keep the risk exposure within 10% of the principal.

Another effective method is to reverse calculate the appropriate position size through the stop-loss level. For example, if a stop-loss margin of 6% is set, then for a capital of 100,000, the maximum acceptable loss amount is 6,000 yuan. Based on this, the appropriate position can be calculated to be about 50,000, but to be more prudent, the actual position can be controlled around 30,000.

As the market cycle changes, investors should also adjust their positions in a timely manner. In a bear market, the trial and error cost of a single operation should be controlled between 5% and 8%. In the early stages of a bull market, positions can be gradually increased to 50% to 70%, but in the later stages of a bull market, about 30% of the funds should be converted to cash to respond to possible market corrections.

Finally, emotional trading is one of the main reasons for the failure of many investors. It is recommended to create a detailed trading plan in advance, strictly control the position of a single coin to not exceed 20%, and immediately stop trading after three consecutive losses to conduct a review and analysis.

Although there is no absolute winning strategy in the crypto assets market, investors can greatly increase the probability of long-term survival and profitability through strict position management and risk control. Successful investors are often those who can remain calm amid market fluctuations, strictly adhere to trading discipline, and are adept at flexibly adjusting strategies based on market changes.