When it comes to position management, many people treat it as a simple math problem—just deciding how much to invest. In reality, it’s much more than that. Position management is more like an emotional brake, directly affecting whether you stay calm and composed or panic and lose control during trading.

Let’s look at a comparison to understand better. Going all-in and suddenly seeing a large bearish candle? Your psychological defense might collapse instantly. Once emotions take over, all your analytical skills and trading discipline go out the window, often leading to a series of bad decisions. Many people's capital disappears, and that’s how the story begins.

On the other hand, what if you only use 10% of your position to test the waters? The same bearish candle might just be a normal pullback for you. You can stay calm, review why you entered the trade, and confidently execute your stop-loss when needed—because the loss is already within your budget. Keeping a steady mindset makes your judgment clearer.

The logical chain here is very clear: emotions influence mindset, mindset determines response, and response directly affects results. Therefore, position management is about taming emotions from the source.

My personal habit is to take it slow whenever possible. For example, I rarely make major opening decisions in the morning; I usually wait until after 2:30 PM. By then, the morning volatility has settled, and the true strength or weakness pattern of the day has emerged. Avoiding the most emotionally turbulent periods helps you naturally avoid many pitfalls.

Most failures in the market are due to rushing—rushing to enter or exit. But trading is most forbidden to haste. Slowing down allows you to see the rhythm clearly, and a clear rhythm is the right path to sustained profitability.

Especially for small-cap traders, the importance of position management even surpasses technical analysis. It’s like your lifeline, ensuring you won’t be eliminated after just a few misjudgments. Treat your technicals as tactics, and your position size as your strategy. Once you understand this, your trading stability will truly improve to the next level.