A friend had only 8000U left in his account last year and was about to give up.

I advised him not to gamble recklessly, but to divide his funds into several parts and only use a small portion to trade.

As a result, in just two months, his account steadily grew to 36,000U.

He himself said that it wasn't about how many times he predicted correctly, but rather about controlling his losses each time and being able to amplify his profits.

In fact, the core principle is just four words: position management.

Many people lose in contract trading not because of market conditions, but because of their position size. Even if they predict the market correctly, they end up losing everything due to heavy positions, holding on to losing trades, or blindly averaging down.

Position management is quite simple; just remember three principles.

First, divide your funds into 5 parts and only use 1 part at a time.

Divide the total capital into five equal parts, and only use 20% at a time.

If you take a 10% loss at once, the actual loss is only 2% of the total capital.

Even if you make five consecutive mistakes, you would only lose 10%, and you would still have a chance to recover.

But once you get it right, hold on to the profits, and you can easily capture more than 50% gains.

Second, trade with the trend and don't go against it.

When the market is falling, most rebounds are traps to lure buyers;

when the market is rising, every pullback is a buying opportunity.

The problem isn't that bottom-fishing is hard, but that many people can't distinguish the trend and insist on going against the market.

Third, add to your position only when you're in profit, and never average down on losses.

The term 'averaging down' has ruined countless people.

The more you lose, the more you average down, which only drags you deeper into the abyss.

The correct approach is to moderately increase your position when you're in profit to amplify your gains; as soon as you incur a loss, immediately cut your losses and exit without hesitation.

In addition, remember a few practical tips:

- Watch the volume: pay close attention to breakouts with increased volume at low levels, and retreat immediately if there's high volume at high levels without further gains.

- Watch the moving averages: a short-term line turning up is a short-term signal; a crossing above the 30-day line is a medium-term signal; a turn on the 84-day line indicates a main upward trend; a turn on the 120-day line indicates a major trend.

- Watch the MACD: when the DIF and DEA cross upwards below the zero line, it’s a good entry point; when they cross downwards above the zero line, it’s a clear exit signal.

Also, make sure to review your trades.

Check daily if your holding logic still stands, whether the weekly trend has changed, and adjust your strategy if necessary. Consistent practice will lead to steady growth in your account.

If you don’t want to keep spinning your wheels, then join me in planning so you can emerge from the lows sooner. The current market is a great opportunity to recover losses and grow your account.

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