$BTC In this lesson, we will discuss position management. To achieve stable and sustainable profits, with minimal losses and large gains, position management is the most important foundation.

As shown in the picture, when we trade in the same market with the same strategy, the results can differ by up to a hundred times.
📖 The difference lies in different position management.
It's very simple, for example, if we participate in a high-low guessing game, if our guess is correct, we get multiple times the bet amount, if wrong, we lose the bet amount. So, how do we control the bet amount X to maximize profit?
The money provided by the game—can we really get it? Actually, if we think carefully, the key to earning money is how we place our bets. For example, each time we bet with position x, the total profit is y, the number of correct guesses is n, and the number of wrong guesses is m, then we can derive the following formula: yᵢ₊₁ = yᵢ (1 + 2x)ⁿ (1 - x)ᵐ. Simplified, assuming our win rate is 50%, then n and m can be considered as one, resulting in a quadratic equation that we are most familiar with.
By continuing the derivation, we will obtain a formula more suitable for trading markets, which is the famous Kelly formula:
y = ∏ (1 + bᵢx)ᵖⁱ, where b is the profit rate, and p is the probability.
📌However, in real trading processes, what we must face is:
There will be updates based on this foundation on how position management should be carried out at various stages of trading.
Hope this article is helpful to you. When you start to realize the importance of learning position management, it is an official step into the trading world. Next, there will be small updates about trading lessons periodically.
✨✨✨By the way, as a bonus for friends who follow me, there is a profit curve management position application in picture 1 that I can provide for free. Contact me to get and try the most suitable position simulation for you 🎉🎉🎉