"Complete and Refined Version of How to Unlock from a Position"

How to unlock? First, understand how the position was created and how it became trapped.
First: The wrong direction was taken, chasing gains and cutting losses in the wrong way. When at the upper band, reduce long positions to protect capital, raising the stop-loss, and it’s also a good time to start trying to enter short positions. When a certain coin is stuck at a resistance level and cannot move higher, this is the time to open a short position at the pressure level. At this point, you should reduce long positions or exit, rather than chasing the rally. Conversely, a sharp decline means reversing the previous approach; these are all signs of 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 replenishment becomes impossible, leading to increasing position size and ultimately only one result—liquidation.
The correct strategy should be: label the first entry with 1U, then enter lightly on the second, and use normal position size on the third. Do not over-leverage.
Over-leverage results in an inability to add to positions, so leave enough space above the current pressure level for potential replenishment.
Third reason: Greed.
Without taking profits or reducing positions, unrealized gains are just floating clouds. Unrealized profits are not real gains; they are just held temporarily, giving you a quick glance but not actual profit.
After setting a stop-loss at breakeven, the position remains profitable and will not generate floating losses.
Fourth: Not strictly executing your trading plan.
Failing to attempt entries when appropriate, leading to missed opportunities.
Over-leveraging when it’s time to lighten up, and chasing rallies or cutting losses impulsively. These factors combined will cause you to be trapped and unable to free yourself temporarily.
Therefore, strictly following your trading strategy can also help avoid being trapped.
These four reasons combined lead to being stuck.
Summary:
1. Chasing gains and cutting losses in the wrong direction.
2. Poor position management, heavy initial position, and inability to add later.
3. Greed, turning unrealized gains into floating losses, compounding the previous mistakes.
4. Having a plan but not strictly executing your trading strategy.
How to unlock:
1. Exit near the entry price (exceeding or close to the entry price) or when slightly profitable (best solution).
2. When the direction is correct but due to reasons like not monitoring the market timely, you get trapped.
(1) For heavily leveraged positions, refer to the first point: do not add to the position. If long is trapped, approach the next level of resistance and strictly execute one action—reduce position or just run away, admit the mistake, and treat it as a lesson.
(2) For lightly leveraged positions, there are two scenarios:
- First, run away near the resistance level.
- Second, miss the opportunity to reduce at the current resistance, then add three times at the lower band to average down, and then exit near the entry price with slight profit. No matter how much profit follows, do not be greedy.
Special note: profits can be left alone without reducing, aiming for better positions, but must set a breakeven stop-loss to prevent losses. The goal is to avoid losing money, not necessarily to make a profit.
Through analysis, what is the best solution to unlock?
1. For poor-positioned trades, slightly profit near the entry price (wait for the dip, which is guaranteed to happen), then close and exit to regain freedom. It’s also acceptable to exit with a small loss; the purpose of a 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, no gains.
2. As long as the position is lightly leveraged, you can add at key levels, tripling the position 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 best 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 future opportunities. Without trying, there is nothing.
4. Extreme case unlocking strategy: if about to be liquidated, what to do? Quickly lock the position to protect capital.
Open a hedge in the opposite direction: open a position with 50% of the margin in the opposite direction, and set a breakeven stop-loss after profits to prevent floating losses and needing to unlock again.
Important notes:
1. When hedging and locking positions, do not set any stop-loss or take-profit orders, as the system will automatically execute these, potentially causing liquidation. Manual unlocking is the only way.
2. Do not place too many orders; limit to 1-2 orders.
3. Try to focus on only one coin to prevent liquidation in extreme market conditions.