Many people ask me a question: "Even when I correctly predict the market direction, why do I still end up losing money?"

Recently, I observed a seasoned trader and found the answer. Even if he occasionally guesses the wrong direction, he still manages to exit with a profit. His secret is simple: solid position management.

This is a sobering fact—there is no such thing as a 100% accurate prediction in the crypto market. Even top analysts can be wrong. But why are some able to make money in the long run despite being right and wrong half the time? It's not because they have superior forecasting skills, but because they understand how to control their positions well.

I saw him execute a classic move that’s definitely worth learning. Some hot coin recently announced good news, and the market was bullish across the board. Retail investors rushed in with full positions. But this guy didn’t follow the trend. He first used 8% of his total capital to test the waters.

Soon after entering, the price started to pull back, dropping as much as 12%. Those who followed him either cut their losses or got trapped. But this expert was different—because his position was light, he didn’t sell at a loss. Instead, when the price hit a key support level, he added another 6% to his position. He also set a strict rule: total loss must not exceed 2%, and he would cut losses immediately if that limit was reached.

This is the essence of position management: using small risks to achieve large gains. Many retail traders go the other way—taking big risks for small rewards, and the outcome is predictable. The difference is huge.