About Entry Positions

There are many articles discussing entry points in the market, but I rarely publicly share my actual entry references. The reason is simple: any technical indicator has its applicable scope and can fail at times. The key is not about quantity but about "mastering one thoroughly."
The fundamental principle of entry is only one sentence:
Buy at support, sell at resistance.
There are many ways to judge support and resistance, such as moving averages, Bollinger Bands, Fibonacci retracement, previous highs and lows. Personally, I most often use Bollinger Bands, which are simple and straightforward.
In a bullish trend, focus on the 4-hour Boll lower band support;
In a bearish trend, focus on the 4-hour Boll upper band resistance.
Some may ask, what if the market is very strong and the 4-hour level shows no pullback? Should I just miss the opportunity?
My approach is to build positions gradually.
Suppose the maximum planned investment is 10,000U:
- First, buy 30% upon breakout,
- Then add the remaining 70% after confirming the pullback.
This approach has two benefits:
First, it prevents missing the trend entirely while waiting for a pullback;
Second, even if a pullback occurs, it allows adding positions at relatively advantageous levels, reducing emotional trading.
But one point must be emphasized repeatedly—
Whether judging the direction or choosing entry points, it is fundamentally a probability event, not 100% accurate.
If the judgment is wrong, the only correct action is to cut losses.
Regarding Take Profit and Stop Loss
Take profit and stop loss determine whether you can survive in the market.
In a complete trading cycle, as long as total profit exceeds total loss, the system is positive. It’s not complicated to achieve, just meet these conditions:
- Each stop loss ≤ 5% of total funds;
- Each profit ≥ 5% of total funds;
- Overall win rate > 50%.
As long as the risk-reward ratio is greater than 1 and the win rate is within a reasonable range, profitability is guaranteed.
Of course, you can also use a high risk-reward ratio with a low win rate, or a low risk-reward ratio with a high win rate; the paths differ but the essence remains the same.
The formula for total profit is simple:
Initial capital × (average profit × win rate − average loss × loss rate)
In my trading system, I only take trades when the market has an expected volatility of over 30%, which naturally results in a higher risk-reward ratio. This is one of the core reasons why long-term gains can be achieved.
But in reality, many people do the opposite:
They rush to take profits when they are winning,
Hold on stubbornly when losing.
Knowing it’s wrong but unable to control it.
This is not a technical issue but a human nature problem.
Greed and fear must be constrained through proper capital management.
About Capital Management
Many say to keep positions light, but what does that mean?
Here’s an actionable standard:
Maximum loss per trade ≤ 5% of total funds.
Exceeding 5% is considered heavy position,
Below 5% is considered light.
Of course, everyone’s psychological tolerance and trading skills differ, so the ratio can be adjusted. But this standard is most friendly to beginners and easiest to stick with long-term.
Let’s also discuss simple interest versus compound interest.
Simple interest has lower risk but slower growth;
Compound interest grows faster but also involves sharper drawdowns.
My strategy is simple:
Trade with simple interest within 30 days, and compound once every 30 days.
This way, I can control drawdowns while still benefiting from the efficiency of compounding. #加密市场小幅回暖 $BTC #2026行情预测 $ETH