The essence of position management is actually managing the stop-loss amount, and its sole purpose is to effectively manage risk. I often say that discussing profits without considering risks is irresponsible; the greatest benefit of position management is that it helps me avoid being reckless in gambling.

Let's do some math. Suppose a gambler has a win rate of 99%. With exceptionally good luck, they can easily achieve 99 consecutive wins. Even with a basic position of 100u, they could quickly become the richest person in the world. However, during the 100th trade, they could lose everything in one go, and the reason is simple: gamblers love to go all in.

Now let's do another calculation. Suppose a speculator has a win rate of only 51%. With average luck, if they pre-regulate their maximum loss to no more than 10% for each trade and only trade plans with a risk-reward ratio exceeding 2:1, then even if they only start with a 100u position, they can easily achieve positive returns without needing overly sophisticated techniques.

This is the value of position management. Scientific position management is not simply adjusting a percentage on an app or casually changing the leverage; this is not much different from entering a trade with your eyes closed. Have you noticed? This is why the actual leverage of cryptocurrency trading often differs from the return ratio of trade orders, and also why people claim to be lightly leveraged at 100x while frequently facing liquidations at 5x leverage.

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