A little tip that you only understand after experiencing it yourself!

In the futures market, why do most people ultimately find it difficult to escape the fate of holding onto positions and facing liquidation?

In fact, the main reason is not trading ability or technology...

but the position.

The position size that can cause fluctuations in your emotions is definitely not the right choice for you.

Trades that can cause you to feel panic, greed, excitement, or depression are usually due to having too large a position or using too high leverage.

Once unnecessary emotions arise, mistakes will be made.

For those with good luck, after completing a task, they regain their sanity; for those with bad luck, they will fall into a vicious cycle of "one wrong step leads to more wrong steps..."

So, to avoid issues like liquidation and excessive account fluctuations, the simplest solution is to:

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. Just go to BTC's 5-minute line, open your eyes closed, and throw the dice to go long or short at will;

However, the position size should start from 0.1 contracts (minimum level), then increase the position for the next order if it's correct, and keep the position unchanged if the order is incorrect.

At the beginning, there is definitely no feeling, after all, the position is too small, and you will find that your win rate is quite high! Then continue to trade, and if you do well, increase the position for the next order.

When you successfully complete a trade and feel great, eagerly wanting 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 can help determine the size of the position that affects your emotions.

Finally, calculate the proportion of this position to your total capital, and you can open positions according to this proportion in the future.

For me, it's about 20%~30%. If I have 100,000 U, then I open a position of at most 20,000~30,000 U for each trade. This gives me no psychological burden at all, and even when holding a position, I have no motivation to look at the candlestick chart. I'm just purely waiting for an email to tell me whether it has hit the profit target or the stop loss...

If the following symptoms occur while holding a position:

1. Always can't help but look at the candlestick chart;
2. Watching the K-line before going to sleep until I fall asleep;
3. Continuously search for tweets related to technical analysis on X;
4. Keep talking in the trading group you added yourself;
5. Feeling excited or anxious;
6. Repeatedly analyze the chart and check the candlestick using different indicators.

So there is no doubt that the position of this order has been increased!

The best approach is to reduce your position, regardless of whether you have unrealized gains or losses, until none of the above symptoms exist.

I have always believed that positions that can influence emotions are not good positions. Once emotions intervene in trading, one may win several times in a row, but it only takes a few losses to potentially enter a point of no return.

Of course, there are exceptions; everyone has a different comfortable position. Some people, like me, don't dare to fill their spot even in spot trading, while others, like General Liang, don't feel anything even when they open 50 times.

In addition: Do you remember the position size ratio that suits you mentioned above?

It is best to also consider the emotions after 5 stop-losses. If your position size allows you to endure 5 consecutive stop-losses without feeling any pain, then congratulations, at this point, you have passively become a rational trader!

The stable emotions of professional traders are not necessarily cultivated through training; many people simply have the ability to manage their positions well. When the position is appropriate, the emotions become stable.

Finally, I have one more question: why is it always good to do simulated trading data, but it doesn't work for real trading?

The answer should be obvious.