Position Management

5 Golden Rules of Position Management: Full Cycle Control from Risk to Return

1. Risk Bottom Line: Single Point Breakthrough → Global Security

• Hard Stop Loss: Single loss ≤ 2% of total capital, black swan not deadly;

• Counter-Cyclical Positioning: Reduce position at high (PE > 80% percentile), increase at low (equity-debt yield differential reaches extreme);

• Zero Leverage Survival: Refuse financing, extreme volatility does not lead to liquidation!

2. Opportunity Sniping: Trend is King, Strike with Precision

• Trial Position - Increase Strategy: 5% base position for trial and error, increase to 20% upon breaking key points (such as annual line);

• Bull Market Exit: PE percentile > 90%, halve equity position;

• Panic Bottom Fishing: Retain 30% cash, buy in batches after a sharp drop!

3. Capital Efficiency: Layered Operations, Both Offense and Defense

• Short (10%): Hot ETFs/Thematic Stocks, quick in and out;

• Medium (40%): Resonance of Fundamentals + Technicals (e.g., earnings exceeding expectations + volume breakout);

• Long (30%): High Dividend/Growth Leaders, harness compound interest!

4. Anti-Human Nature Game: Tame Greed and Fear with Rules

• Half Position Roller Coaster: Flexibility in choppy markets, avoid full position anxiety;

• Individual Stock Position Limit 20%: Prevent “all-in” trap;

• Profit and Loss Isolation: Take profit on gained part, hold principal part, maintain composure!

5. Compound Interest Engine: Drawdown Control = Return Accelerator

• Halve Drawdown, Double Returns: If annualized return is 15%, drawdown from 30% → 15%, final value earns 2.7 times more;

• Volatility Matching: Halve position for high volatility varieties (e.g., Sci-Tech Innovation Board);

• Quantitative Position Adjustment: Use ATR indicator to dynamically match position with market risk!

Streamlined Practical Example (2024 Strategy):

• Risk Control: CSI 300 PE > 15 times, equity position from 80% → 50%;

• Opportunity Capture: New Energy PB < 1.5 times, 10% trial position → increase to 20% upon trend reversal;

• Capital Layering: 30% Coal/Bank (dividend base) + 20% AI ETF (swing trading)

→ Core Logic: Exchange position for win rate, win against human nature with discipline.