Lately I’ve been seeing a lot of people tying ETF fund flows together with the risk appetite in US stocks, and that’s actually pretty interesting—but when I’m watching the market, I don’t really pay attention to that.

Back to the point: position management, in plain terms, is basically one sentence—when you’re losing, don’t let it hurt so much you can’t sleep; when you’re winning, don’t regret not going in with more. I often can’t hold spot positions. It’s not that I don’t understand—my problem is that my position is too heavy. Once it drops 5%, I start wondering whether I’m the one who’s wrong, and then I end up cutting at the bottom. Futures are even worse: I had one time before where the direction was right, but the leverage was too high, and a single wick wiped everything out.

My simple-minded method now is to first figure out how much I could lose at most if I’m wrong, and only open a position if I can accept that. As for how much to open, I just work backward from there. It’s pretty dumb, but then again… for now, that’s how it is.