When you open a position that is beyond your psychological tolerance, every small fluctuation in the market will be magnified countless times in your eyes. You may be full of excitement at first, but as long as the price fluctuates slightly in the opposite direction, your brain will instantly switch from "rational thinking mode" to "survival mode."

In survival mode, what the brain cares about is not "how to follow the trading system", but "how to avoid the current pain and danger". At this time, trading discipline will disappear, and you will start to make the following four fatal actions:

Hesitate to enter the market: The signal clearly appears, but you miss the best point because of fear of loss.

Trailing stop loss: When the price approaches the stop loss position, because you cannot accept the pain of loss, you move the stop loss line back, resulting in a small loss turning into a big loss.

Taking profits too early: If you make a small profit, you will be scared and run away, for fear that the cooked duck will fly away and miss the big market trend later.

Carrying on losing orders: The brain is down, neither cutting nor operating, and watching the account return to zero.

All these mistakes are not strategic issues, but psychological risk issues caused by too heavy positions.

Why is small position the real power?

Many traders look down on small positions, thinking they are too cautious, and feel that only large orders can show confidence. This is actually the "self" at work. The market does not reward confidence, it only rewards those who can execute calmly. When you reduce your position to the point where it doesn’t matter if you lose all your money, you willFind that your emotions begin to become neutral, and trading is no longer a life and death gamble, but a routine.

You can abide by the stop loss and take profit rules without any psychological burden. Can really let probability come into play. Trading is a long-term game. Only by not being kicked out by emotions can the advantages of your trading system be reflected through the law of large numbers.

Small positions are more in line with the drawdown limits of proprietary trading

In the EagleTrader assessment, rigid rules such as a single drawdown of 2%, the maximum intraday drawdown, and the maximum account drawdown appear to be a restrictive red line, but in fact they are a mandatory position brake.

As mentioned before, losing control of a position is the starting point of losing control of emotions. The function of this rule is to use external systems to help you control your positions within a safe range.

When you have to calculate the lot size and stop loss space for each transaction in advance to ensure that the 2% red line is not touched, small position trading changes from "self-restraint" to "natural habit".

If you now feel that trading makes you very anxious and painful, and you can't always control your hands, please try to reduce your position to one-fifth or even one-tenth of its original size. It’s reduced to a level where you feel “it doesn’t matter whether you do this transaction or not, and you won’t feel bad if you lose this money.”

You will find that when you no longer worry about liquidation and when your hands no longer shake, you can see the true trend of the market clearly and make the most rational decisions.

If you are tired of being on tenterhooks every time you place an order and are afraid of retracement and swallowing up your principal, you may wish to carefully understand the assessment rules of domestic self-operated platforms and let self-operated trading help you relieve the burden of financial pressure. If you want to know more about proprietary trading, you can tell me in the comment area!