Talk about it from the perspective of capital (position) management.
Opening with a heavy position, if wrong, stop-loss, then the loss will be severe, so heavy positions are not allowed; it’s a major taboo in futures.
Opening with a light position, if correct, the market moves in the direction you opened, but you won’t make much money since the position is light.
Heavy positions are not feasible, fearing large losses; light positions are also not feasible, fearing small profits.
A contradiction has arisen; how to resolve this contradiction?
Adding to a position with floating profit is a very good solution.
Open with a light position, if wrong, stop-loss, the loss is not significant.
Correct, move the stop-loss; when the stop-loss crosses the cost price, this trade has no risk anymore. If a new opening signal appears, add to the position; this is adding with floating profit, and treat the new position accordingly: if wrong, stop-loss; if correct, move the stop-loss... repeat the above process.
With such operations, you will find that no matter how many times you add to a position with floating profit, only the last addition has risk; the previous positions are risk-free, at most they won't make money, but they won’t lose money. It’s not scary, even if the total position is heavy.
To elevate the capital curve, you rely on heavily investing to capture a trend; where does that heavy investment come from? It's not about starting with a heavy position; that’s gambling, it’s a way to lose, it comes from adding to positions with floating profit.
I am Wenhua, focused on analysis and teaching, a mentor and friend on your investment journey! I hope everyone investing in the market can sail smoothly; as an analyst, the most basic thing is to help everyone make money. I will help you resolve confusion, locked positions, and provide operational advice, speaking with strength. When you are lost and don’t know what to do, follow Wenhua to find direction.