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 that you are hedging or have any luck. If you can still be caught or face a margin call, you are certainly not qualified.

2. The stop loss amount for each trial position must not exceed 5% of the total amount (depends on your own risk tolerance; I suggest starting below 5%, and once you can stabilize profits, you can set it higher based on your own risk);

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

Note: See the position calculation formula in the table below.

3. After you make a mistake with a trial position, you must set a stop loss. Do not attempt to add to your position thinking you can walk away without a loss. The market is mostly volatile; indeed, most of the time you can manage to break even by adding to your position, but once the trend turns against you, you're done; (Do not average down on unrealized losses)

Strictly enforce stop losses. If total capital loss reaches 30%, you must unconditionally close your positions immediately. Keep the green mountains, and don't worry about not having firewood to burn. Never think about adding to your position against the trend to recover your losses;

4. If you forget to set a stop loss and realize it later, you must close your position immediately. Do not expect to wait for a rebound or correction to close your positions or think about adding to your position to average down your losses. Almost all big players have perished in this area. You may survive 10 times, but if you fail once, the previous 9 times will be in vain.

5. Initially, it is recommended to add to your position in a 1:1:1 or 1:2:1 manner. For example, if you start with a 5% position, a 1:1 means adding another 5%.