Risk management and position control are the keys to achieving long-term stable profits.

I. Set stop-loss and capital scale

Before opening a position, it is essential to clearly set stop-loss points to prevent excessive losses caused by sudden market fluctuations.
Stop-loss orders can automatically close positions when prices reach the pre-set levels, thereby limiting potential losses.

II. Capital allocation and risk limits for individual trades

The position for each trade should not exceed 30% of the total capital to avoid overall account risk control failure due to a single large position.
Control the allocation to a single asset by setting position limits to prevent excessive concentration.
Before entering the market, you should also calculate the maximum bearable loss in advance and set stop-loss orders accordingly to ensure the longevity of the account.
For example, if the account balance is $10,000 and a risk limit of 3% is chosen, the maximum loss per trade should not exceed $300.

III. Trend trading and position management

After a significant trend develops in the established direction for two consecutive days, if no trend limit occurs, consider reducing positions to lock in some profits and lower retracement risks.

IV. Position reduction strategy when decision-making is uncertain

When the market environment or individual stock trends are unclear, positions should be decisively closed, or at least reduced to half of the original position, to avoid potential risks and maintain trading flexibility.

V. Synchronize position increase and stop-loss settings

When increasing positions, it should be based on effective technical signals (such as support levels or signs of a strong upward trend), and stop-loss positions should be adjusted synchronously to ensure that the risk of the new position is controlled.

VI. Trading anxiety and position control

If the size of the position causes the trader obvious anxiety, they should reduce their position in a timely manner; excessive anxiety can interfere with decision-making and lead to more serious losses.

VII. Beware of market optimism

When surrounded by irrationally optimistic sentiments, remain vigilant, as excessive optimism often means risks are underestimated, making the market prone to fragile conditions.

VIII. Limit on the number of positions held

The number of positions held simultaneously should not exceed three, to allow focused tracking and timely adjustments, avoiding excessive diversification that leads to shallow research.

IX. Trading plan and overall thinking before entering the market

Before each trade, a complete operational plan should be developed, including confirming the overall trend direction, setting the first profit target, and strategies and ratios for when and how to reduce or increase positions, making the trading more disciplined and systematic.

X. Conclusion

Effective risk management and position control are the cornerstones of long-term stable profits. By strictly adhering to stop-loss and position limits, combining trend judgment and market sentiment analysis, as well as decisively reducing positions in uncertainty and synchronously setting stop-loss when increasing positions, traders can remain invincible in a complex and changing market environment. Continuously optimizing trading plans and internalizing the above ten principles into trading habits will help improve overall trading performance.