Capital Management, Five Principles:

1. Always set a stop-loss after opening a position, always set a stop-loss, always set a stop-loss. Make it a habit; you must set a stop-loss when opening a position. Do not think of yourself as hedging or harbor any notions of luck. If you can still be caught in a loss or face a liquidation, you are definitely unqualified.

2. The stop-loss amount for each trial position must not exceed 5% of the total amount (based on your own risk tolerance; I suggest initially setting it below 5%, and after you can stabilize your profits, you can adjust it based on your own risk);

For example: Suppose you invest 50,000 and intend to set a stop-loss at 48,000, then 50,000 - 48,000 = 2,000 / 50,000 = 2.5%. If the loss for a single trial position cannot exceed 5%, then at most you can only use 20% of your capital as margin to open a position.

Note: The position calculation formula can be seen in the table below.

3. If you are wrong in your trial position, you must stop-loss; do not attempt to add to your position thinking you can exit without a loss. The market is mostly volatile; indeed, most of the time you can rely on adding to your position to break even, but as soon as the trend goes against you, you are finished; (do not average down on floating losses)

Strictly stop-loss. If total capital losses reach 30%, you must immediately close positions unconditionally. Keep the green mountains so you don’t fear having no firewood; never think about adding to your position against the trend to recover losses before addressing it;

4. If you forget to set a stop-loss and realize it later, you must close your position immediately. Do not expect to close your position after a rebound or pullback, or think about adding to your position to average down losses; almost all big players have fallen because of this. You might withstand it 10 times, but if you cannot withstand it just once, the previous 9 times are all for naught.

5. Initially, it is recommended to add to your position in a ratio of 1:1:1 or 1:2:1. For example, start with a 5% position, in a 1:1 ratio, you would add another 5%.