Long-Short Position Adjustment Methods in Spot Trading: A Practical Perspective

This morning, I sat down to review my recent trading mindset, and I want to summarize some principles for increasing and decreasing positions in spot trading, especially in the context of a declining market trend. This is not just theory from books but based on what I have been applying and continue to do.

1. When Identifying a Downtrend: What to Reduce First? When the downtrend has been confirmed (based on macro, capital flow, and technical analysis), the first step is not to pray for the market to turn around but to proactively reduce risk. The order of reducing positions should be: Reduce weak altcoins, altcoins without narratives. Then move on to large-cap, bluechip altcoins. Three Common Types of Position Reduction a) Left-side Reduction (Left-side) A defensive reduction, based on macro signals and capital flow, before the price actually crashes. This step is very difficult because it requires accepting “selling early.” b) Right-side Reduction (Right-side) Reduce when the downtrend has become clear, usually: The first strong 4H candle drop or the first trading day decline. c) Rebound in a Downtrend (Rebound Rescue) This is a very important type of decline. Many people: Miss the left-side reduction Miss the right-side reduction → End up just “lying still and taking it” This is a mistake. A rebound within a downtrend is still a valuable opportunity to save your account. The market always offers opportunities; the question is whether you dare to seize them.
2. Decreasing Positions: Switch to USDT or BTC? Core principle: 👉 First reduction should prioritize USDT, then gradually shift to BTC in subsequent reductions. Why is that? A downtrend does not happen in a moment but is a process: Initial phase: like “free fall” Then: consolidation, recovery, and a clearer long-term trend. 👉 Early reduction to USDT: preserve profits 👉 Later reduction to BTC: prevent V-shape reversal scenarios Especially in a bull market, V-reversals happen very quickly. Holding some assets in BTC helps prevent being completely sidelined if the market sharply reverses.
3. Facing Emotions During Position Reduction This is the hardest part, not technical but mental. a) Common Mistake: “It Will Rise Again Tomorrow” Many people hesitate to reduce because: They believe the price will rebound the next day Hope the market “comes back to their side” This is a misconception driven by emotions. b) Rebound in a Downtrend is a “Trap” Let me emphasize: Don’t try to catch the bottom, don’t try to catch the bottom, don’t try to catch the bottom! A rebound in a downtrend is not a reversal but often: A psychological trap The best opportunity to reduce remaining positions Many see a rebound and think “my money is about to come back,” then hold more. But in reality, it’s the last chance to exit. c) Don’t Compare Current Price with Your Cost Basis Whether: You are in profit Or it’s a “moonbag” Or “all profits, so no worries” 👉 All are money. The market does not care about your cost basis. Moonbag is also money. Profits are also money. “Unrealized losses and unrealized gains are both money; there is no fundamental difference.” d) Exception: Coins with Independent Movements In a general downtrend, some coins still run independently, such as $VIRTUAL). I do not reduce this coin, and in fact, it still increases. However, these cases require extremely close monitoring and cannot be taken lightly.
4. When to Stop Reducing and When to Start Increasing Positions? Simply put: everything is done in the opposite way compared to during declines. a) Two Ways to Start Increasing Positions Right-side: Only increase when the uptrend has been confirmed Left-side: Start increasing during the final phase of a downtrend, when the market is consolidating sideways Macro indicators, capital flow, technical analysis… just need to be read in reverse compared to the decline. b Order of Increasing Positions BTC Bluechip altcoins / valuable coins Meme / high-beta altcoins Usually after a sharp decline: The market will consolidate sideways for a while But in a bull market, V-reversals can happen very quickly 👉 If sideways for 1–3 days: Consider shifting most to BTC Wait for trend confirmation Then switch from BTC to bluechips, memes, or altcoins Conclusion Spot trading is not about buying and praying but about: Position management Emotion management And understanding that reducing positions is just as important as increasing them In a downtrend, reducing correctly is a form of self-preservation. In an uptrend, increasing in the right order maximizes profits. The market always offers opportunities — the key is whether you are alert enough to recognize them.