Reducing position as a defensive strategy mainly focuses on low longs, which is a primary defensive method for trading in a long positions structure. It's not always necessary to set a stop loss; sometimes a small long wick candle can be quickly followed by a rebound, and in such cases, the stop loss would miss out.

In an upward trend, it is normal to protect against a reduction in position on the short-term by using the daily high point - [(daily high point - daily starting point) * 0.618]. Generally, a pullback to 0.50-0.618 is a normal entry point for going long, and in rare cases, it may drop to the next support point. Therefore, here you can reduce your position by 25-50% for protection, and the reduced part can be replenished at the nearest support point below. The reason for only needing to reduce position for protection is that it is expected to go up on the short-term, rather than experiencing a significant correction or taking a few days to go up again. At this time, reducing position for protection results in minimal loss on the short-term. For users with small capital, there are not many options; as long as you are near a forced liquidation, you need to set a stop loss, and there is no choice in this matter. For small capital trading contracts, maximize your strategy as much as possible, because entering and exiting quickly will continuously raise your average cost, and being too close to the market price daily, frequent trading can't withstand normal fluctuations and can result in significant losses. Additionally, if you reach the last position without a nearby stop loss, it is easy to lose your chips. Hence, for small capital positions during strong market conditions, like going long on ETH over the past few days, aim for a few hundred points in strategy, take profits in batches while moderately adding positions, and keep the average cost price at least 120 points below the market price. This way, the short-term risk is greatly reduced, rather than gambling every day that it won't drop below your perceived liquidation price, which is merely your assumption.