Regarding position sizing, many people have it backwards. It's not about how much money you have and then daring to invest that amount, but rather the opposite—you should decide how much you can afford to lose, and that determines how much to invest.

Let's clarify the logic first. Trading is essentially a probability game; not every trade will be profitable. True experts focus on three things: first, when they are wrong, they can afford to lose and do so slowly; second, when they are right, they can hold on and fully capitalize on the trend; third, after continuous trading, their account won't collapse.

Suppose you start with a capital of 1000U, how should you trade?

**The core rule is simple: each trade's position size = 10% of the current account balance.**

This way, your initial single trade position is 100U. Why this ratio? Because any single trade won't kill you. As long as you don't lose control over each trade, you always have a chance to turn things around. Many people blow up their accounts because their single trade size is too large, and they lose their chance to recover in one go.

But that's not enough. The second common mistake is: after losing, they want to add more to recover; after winning, they start to reduce their position. This is completely driven by emotions.

The correct approach is: **only follow the account, not feelings**.

If your account grows to 1200U, then the next trade's base position size becomes 120U. This isn't because you "feel" this trade is stable, but because profits prove you have the qualification to allocate a larger position. Conversely, if the account shrinks, you should also reduce your position, even more conservatively. This way, you can keep pace with account growth without taking excessive risks.

To sum up: position management is risk management, and risk management determines how long you can survive. The longer you survive, the more you can earn.