I will share a personal experience that helps understand a little tip!
If you want to stay away from liquidation, excessive account fluctuations, and other issues, the simplest solution is:
Only trade with low leverage and small positions, then use repeated execution and long-term accumulation to achieve compound interest.
If you don't believe it, you can give it a try. Go to the 5-minute line of BTC, close your eyes and open positions, throw the dice and trade freely in both directions;
However, start with a position size of 0.1 contracts (the minimum size), then if you make a correct trade, increase your position for the next trade; if you make a wrong trade, keep the position the same;
When you make a correct trade and feel great, eager to increase your position for the next trade, pause!
Remember the size of this position; this is the most suitable opening amount for you.
Because greed always comes before fear, using this gradual testing method, you can determine the position size that affects your emotions.
Finally, calculate the proportion of this position to your total funds, and from now on, open positions according to this proportion.
For me, it's about 20%~30%. If I have 100,000 USDT, then each trade should open a position of at most 20,000~30,000 USDT, which puts no psychological burden on me. Even when holding positions, I have no motivation to look at the candlesticks; I just wait for an email to tell me whether I've taken profit or hit a stop loss...
I firmly believe that positions that can affect emotions are not good positions. Once emotions are involved in trading, you may win several times in a row, but just a few losses can lead you down a path of no return.
It’s best to also consider your emotions after five stop losses. If you can endure five consecutive stop losses without feeling pain, then congratulations, at that moment, you have passively become a rational trader!
The stable emotions of professional traders are not necessarily all cultivated; many simply know how to manage their positions. When the position is right, the emotions stabilize as well.
Finally, let me ask a question: Why does the simulated trading data always look good, but real trading does not?
The answer should be obvious to you.
