What does the 4321 ratio of reducing positions in the currency circle mean?

The currency circle reduction ratio 4321 is a position management strategy that includes the following steps: when the price rises/falls by 4%, reduce the position by 30%; when the price rises/falls by 3%, reduce the position by another 20%; when the price When the price rises/falls by 1%, reduce the position by 10%. The strategy is designed to lock in profits, reduce risk and manage sentiment by gradually reducing positions.

The 4321 ratio of reducing positions in the currency circle

In the currency circle, the 4321 ratio of reducing positions is a common position management strategy designed to reduce investment risks and ensure profitability.

What is the 4321 reduction ratio?

Reduce positions 4321 The ratio refers to gradually reducing positions in a certain proportion when the asset price rises or falls to a preset percentage. Specifically, when the price rises or falls by 4%, reduce the position by 30%; when the price rises or falls by 3%, reduce the position by another 20%; finally, when the price rises or falls by 1%, reduce the position by 1%. 10% of the position.

Reduce positions 4321 principle

Reduce positions 4321 ratio is based on the following principles:

• Lock-in profits: As asset prices rise, investors lock in profits by gradually reducing positions.
• Reducing risks: When asset prices fall, reducing positions can reduce positions and reduce risk exposure.
• Manage emotions: Through the preset position reduction points, investors avoid emotional decision-making and handle position adjustments more rationally.

The use of 4321 ratio for reducing positions

The 4321 ratio for reducing positions is suitable for various trading strategies, including:

• Trend trading: In an upward price trend, investors can use the 4321 ratio for reducing positions to gradually lock in profits.
• Counter-trend trading: In a downward price trend, investors can reduce risks by reducing their positions at the 4321 ratio and re-open positions when the price rebounds.
• Swing Trading: Reduce positions 4321 ratio can help investors seize price fluctuations, reduce positions at high points, and build positions at low points.

It should be noted that the 4321 ratio for reducing positions is just a strategy for position management, not a formula to guarantee profits. Investors need to make adjustments based on their own risk tolerance and trading style.

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