Stability should be your primary consideration. Traditionally, capital management includes issues like the profit-loss ratio of each trade, the overall risk of trading, and the issues of increasing positions and exiting during the trading process. We can summarize it into several points: 1. Portfolio: Investment direction 2. Position size: How much to invest 3. Timing: When to enter and exit.

Trading is like running a business; capital management is a crucial factor that can determine survival. Stability should be your primary consideration. Traditionally, capital management includes issues like the profit-loss ratio of each trade, the overall risk of trading, and the issues of increasing positions and exiting during the trading process. We can summarize it into several points:

1. Portfolio: Investment direction.

2. Position size: How much to invest.

3. Timing: When to enter and exit.

Question: Is it related to the small capital scale that trading achieves nothing?

Answer: The size of trading funds does not necessarily correlate with whether you are a successful trader. Many people cannot even manage a small account well; how can they expect to manage a larger account successfully? Different sizes of accounts require different strategies and methods. Many people fail with small capital accounts mainly due to improper methods.

Large capital accounts: The ability to withstand drawdowns is strong; they can set wider stop losses, and once a stop loss is triggered, the loss will be significant; the profit potential is greater, and the return cycle is longer; more suitable for trend trading.

Small capital accounts: The ability to withstand drawdowns is weak, the space for setting stop losses is small, generally close to the current price, so absolute losses are also relatively small, and the profit cycle is short. Quick returns can provide emotional satisfaction to traders. More suitable for swing trading.

In summary, based on the characteristics of different capital accounts, large capital is suitable for large trends, while small capital is suitable for swing trading.

Question: Most people have small capital accounts; can you introduce management methods more suitable for small capital accounts?

Answer: If you want a small capital account to grow rapidly in a short time, you might need to pay attention to the following issues.

1. Survival comes first. No matter the size of the account funds, this is the first principle.

2. Only trade short-term fluctuations. The biggest disadvantage of a small capital account is its weak ability to resist drawdowns; even a slightly larger drawdown can lead to liquidation. Therefore, it's best to only trade intraday short positions.

3. Regardless of profits or losses, you should limit the number of trades you make each day. It’s best to not exceed 3 trades per trading day. If the first two trades are losses, it’s better to stop trading to avoid being influenced by your mindset. Moreover, you should also take profits in a timely manner; don’t continue trading just because the first three trades of the day were profitable.

4. Only trade one type of asset at a time. For small capital accounts, don't think about diversifying investments; it's unrealistic. Since the account funds are already limited, trading multiple asset types simultaneously will only reduce your risk tolerance and may result in greater losses.

5. Be good at seizing big opportunities. For a small account to grow, if you only rely on making small profits each day, it will take a long time, similar to the compounding model mentioned earlier. Therefore, for a small account to grow quickly, one must be adept at seizing opportunities, capturing a big opportunity from time to time, and patiently waiting for the next opportunity. This can also be understood as winning by quality rather than by quantity of trades.

6. Increase your position size; be bold but careful. I've mentioned many times before not to over-leverage. However, if you want to gain substantial profits from speculative trading with a small amount of capital, you must be willing to take larger positions. If you want a small capital account to grow quickly, you need to increase your position size while seizing opportunities. At this point, do not fear larger positions, and do not equate large positions with liquidation. The core reason most people face liquidation is not due to heavy positions but rather because they easily enter the market, frequently stop-loss, or even fail to set stop-losses.

For a person to become an excellent investor, capital management is of utmost importance; I refer to it as the lifeblood of investment.

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