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《The First Lesson of Trading: Scientific Leverage of Capital Position Management》

Investment varies from person to person and there is no standard answer. In the trading market, making money is not about competing for the first or the last, but about making money continuously. Steady profits are the way to survive. In any investment trading system, capital position management is the first step. Its most important core is leverage and stop loss. The first is leverage. How to choose a scientific leverage to ensure the stability of your principal? I think that in your investment trading system, three to five consecutive reasonable stop losses cannot exceed 15% of the principal. Let's take three stop losses as an example. If each stop loss is 5%. Then three times is 15%, then you should not use leverage. If each stop loss is 1%, then your maximum leverage should be controlled at 5 times. Many traders are keen on using leverage to make a small profit, but they don't know that unreasonable leverage is the root cause of your unstable trading. For example, the most important 20x leverage in the market, even if it is only a 1% stop loss, one stop loss means a loss of 20%, three stops means a loss of 60%, and only 40% of the principal is left. Earning back 60% of the principal is no longer 60% but 120%. This undoubtedly adds many uncertainties to your trading system and subsequent transactions. When your account is unhealthy, it will cause your execution mentality and emotions to fall into an anxious state. You will operate to get your money back, and you will most likely end up tired and lose money.

Statement: All our positions use position-by-position leverage. A single position is isolated from other positions and other funds. Position-by-position leverage is to avoid the risk of abnormal platform failure to stop loss, and our final total funds are always controlled in scientific leverage. At present, we choose not to add leverage. For example, if our funds are 1 million, all our positions will not exceed 1 million in total.