Why do people always like to increase their positions when in profit? But isn't it easier to incur losses when the market reverses?

Actually, many people think that increasing their position when in profit can quickly amplify returns, but they overlook the fact that a market reversal can turn profits into losses in an instant. This kind of "illusionary position increase" can sometimes be a "sweet trap." Today, I would like to share how I increase my positions when in profit, hoping to provide some help!

My position increase logic:

1. I will increase my position a maximum of three times. I operate on a daily chart, and before each position opening, I will divide my capital into three equal parts.

2. Each time I open a position, the stop-loss is calculated independently, not averaged out. This can avoid an overall loss due to one erroneous judgment.

3. Conditions for increasing positions:

The first order must be profitable before considering the second order.

The second order must be profitable before opening the third order.

An important point is that before each position increase, two conditions must be met: the previous order must have already made a profit, and the new stop-loss point must be above the cost price of the previous order. This can effectively reduce unnecessary trades.

How to deal with floating losses?

The position size of the first order is small, and if the stop-loss is also a small loss, then seek new opportunities later.

The second order must meet two conditions: the first order must be profitable, and the new stop-loss point must be above the cost price of the first order. If the second order is stopped out, the first order still breaks even.

The third order follows the same logic; if stopped out, only the third order is lost, while the first two orders remain at breakeven.

The key point is: no matter how many positions I open, the risk I expose to the market is always just the latest order. This way, even if I get stopped out 10 times or 20 times, as long as I successfully seize one major market trend, the previous losses won't matter.

Be cautious when increasing positions; don't blindly chase rising prices, otherwise, profits can turn into losses in an instant.

I don't trade often; over the course of a year, I only make a few moves, but each time is a high-win-rate setup, avoiding losses from frequent trading.

Opportunities for the next layout

Next, I will be focusing on: DOGE, PEPE, NEIRO.

Here comes the key!

I will bring my followers along to lay out a few mysterious projects. If you want to get on board together, leave "111" in the comments; opportunities wait for no one! 🚀