Small capital position management: survive first, then talk about making money

1. Why position size is more important than entry and exit points
For small funds, whether you can survive determines everything.
No matter how perfect the entry and exit points are, a single loss of control in position size can lead to immediate elimination.
Position management determines "survival time," not individual profit and loss.

2. The true core of trading
1️⃣ Capital preservation first
Your principal is your only means of production. Without it, skills and experience are reset to zero.
Protect the principal first, then qualify for long-term stability.

2️⃣ Stable mindset
Trading appears to be about market analysis, but essentially it’s about fighting emotions.
Overleveraged positions will distort your mindset; fear and greed will influence your orders.

3️⃣ Only take confident opportunities
Trading isn’t about acting every day, but about waiting for the few times worth acting.

4️⃣ Compound thinking
Real growth comes from compounding, not big hits.
To achieve compounding, the first thing is to control drawdowns.

5️⃣ Simple repetition
Long-term profitability doesn’t rely on tricks but on repeatedly executing effective operations.

3. Several position models suitable for small funds
• Equal division of positions
Divide funds into 4–5 parts; simple calculation, easy to execute without distortion.
• Fixed risk ratio
Maximum loss per trade does not exceed 2% of total funds; first calculate how much can be lost, then decide the position size.
• Pyramid adding positions
Add positions only after trend confirmation; never add in the wrong direction.
• Balanced position structure
Base position + rolling position + reserve funds
Never fully loaded; always keep room to adapt to changes.

4. Key details in practical operation
1️⃣ Concentrate small funds
Small funds are not suitable for diversification.
One or two opportunities that can significantly change the account curve are considered meaningful trades.
Use subtraction for small funds; larger funds focus on allocation.

2️⃣ Holding cash is also a form of operation
When there are no opportunities or market is unclear, holding cash is the best risk control.

3️⃣ Fixed review
Review trades weekly, focusing on whether the position size is reasonable, not just right or wrong.

4️⃣ Technical analysis and mindset together
Position size determines mindset; mindset determines execution.
Loss of control in position size will distort even the best technical skills.

5. Final words
Position size = risk.
For experienced traders, position management is not a skill but an instinct.
Survive first, then wait for your market opportunity.