How to manage position allocation from a probabilistic perspective to ensure profitability.
The first thing to make sure is whether your trading strategy has a winning rate of more than 50%.
If you look back on your historical trading process, no matter how much the amount is, you will basically make money 10 times, for example, 6 or more times.
The first point is that you need to determine the amount of your bet each time, such as 50,000 u each time or 500,000 u each time for the trading opportunities discovered by the same strategy. The winning rate of this strategy will directly determine your profit, rather than random bets. In this way, it will not happen that you make 20% when you invest 10,000 US dollars nine times, lose 20% when you invest 100,000 US dollars once, and end up with a loss in the final calculation.
Second, for trading opportunities generated by the same strategy, the stop loss ratio executed in the transaction must be strictly unified. For example, the stop loss ratio should be unified when the loss is 15%. Different strategies can formulate different stop-loss positions and unreasonable profit-taking positions.
Third, a very critical point is that the proportion of the strategy's take-profit point is higher than the proportion of the stop-loss point. For example, 20% of profit is taken as profit and 5% of loss is taken as stop-loss. Only in this way can you make big money and lose small money with probability.
The fourth and final point is that if the profit has not reached the target price of the profit-taking point, at least or try to ensure that you take the profit above the cost line to further reduce the probability of loss.
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