[Red Envelope] Ayii Tips (2): Counting the Road Taken, Personal Trading System Sharing on Position Management.

I am a professional stock trader. Believing that “sharing joy is better than enjoying alone,” I chose to register on Taoguba to share my personal insights. In this market, I have always believed that only the “front-runner” truly demonstrates strength; only logic is the skill to navigate bull and bear markets. Welcome brothers to observe. [Taoguba]
My recent post gained nearly 300 followers, over 100 likes, and at that time, with only 150 followers, I ranked on the platform’s hot list. I sincerely thank everyone for their recognition and the official recommendation. I am deeply grateful. Yesterday’s post exceeded expectations, and here is the valuable content promised to my followers.
I do not teach so-called fixed patterns. Under the current boost from quantitative trading, all so-called fixed patterns will become data for quantification. The patterns you think of will become the opposite signals for quant models. A few years ago, popular strategies like leading stock tactics? Limit-up nodes? Ice point strategies? Now, looking back, it’s like reading history.
For those still pursuing these so-called strategies, I suggest not wasting much effort learning them. You’ll find that often, the market makes money from what you call strategies.
A few years ago, I first tried short-term trading. Within half a year, I blew up my account. My mentor at that time told me a sentence I remember vividly.
He said that blowing up in half a year is a good thing. Losing money is part of the experience, but the short time means no messy lessons, and there’s still hope.
That’s why I systematically want to teach everyone a complete trading system. Essentially, no matter what, first build a solid foundation. When learning to write, if your sitting posture is bad, your handwriting will be poor. The same applies to all industries. So if you think I will teach a super powerful strategy that can help everyone consistently profit through bull and bear markets, then you can skip this.
Getting back to the main topic.

For a mature trader, a complete trading system—or one that influences profitability and controls drawdowns—must consider three levels.
One is review; at minimum, you need to understand what happened in the market, rather than focusing solely on the ups and downs of your holdings.
One is expectation; have a general judgment about the next day’s market and individual stocks in your holdings, with reasonable expectations and understanding.
One is position sizing; be able to increase positions on good stocks and reduce losses on bad ones.

Today, I will discuss the foundation of a trading system: position management.

Many people have experienced this: initially buying some stocks, seeing them rise, feeling good about profits, then adding more at high levels and getting caught out.
Or during a period of strong limit-ups, hesitating to buy more, discovering profits, and then rushing in en masse as the limit-up streak begins to fade.
Position management is about continuously optimizing your trading system—finding the right points within your system to increase positions.

Because among my followers, there are both beginners and veterans.
For beginners, regardless of your trading style, I believe maintaining a stable mindset is the prerequisite for consistent profits. A simple tip: always keep your position below 50% of your total capital.
Unless there are major themes, such as the unusual movement of Dongcai (924), Deepseek early 2025, or commercial aerospace at year-end, 90% of the time is “garbage time.” Keep your positions below 50%. Although this dilutes your profit and loss ratio, in the long run, it doesn’t affect your ability to make money.

If you have 1 million, set 500,000 as your trading cap. Reduce daily volatility from 10% to 5%. Your risk becomes manageable—you won’t see a doubling of your holdings overnight, nor a 50% cut. A 50% loss requires a 100% recovery, which is simple logic.

Second, if you are a newcomer with limited capital, I have another suggestion.
Don’t risk your entire life savings right away. Before you develop stable profits, limit your total capital to 10,000 yuan. No leverage, no additional funds—just your own money. You only get one chance to risk everything. With 10,000 yuan, you have multiple opportunities. Once you can double your capital and maintain stable profits for over half a year, then gradually add funds.

This is heartfelt advice from someone who once blew up an account. It’s for absolute beginners.

Next, let’s move to the core content that veteran traders care about.

I will explain specific position management models.

First, determine your trading style: trend-following? Breakout? Mid-term?

For breakout trading, I recommend a single-stock position of 20%.
Split that 20% further: for example, if your entry point aligns with your pattern (including but not limited to stabilizing above moving averages, strength against the trend, unexpected rebounds, etc.), allocate 10% upon stabilization above the moving average, and another 10% when the stock hits the limit-up or shows strong momentum.

For mid-term or low-entry strategies, I usually buy in batches. For example, if I say I will buy in parts on dips, I might buy 5% when the stock stabilizes above the moving average, and 15% when it starts to rise strongly.
Avoid buying at low points during intraday dips out of fear, only to regret when it rises. Instead, buy at higher levels during intraday surges, which often results in poor entries.

Take Friday’s Hanlan (汉缆) as an example.
Before the market opened, I had a trading plan for Hanlan (see the attached chart for new followers).

For instance, if the pre-market order is a one-word order (e.g., a buy order at the open), I plan to buy at most 5 lots.
At the close of the auction on Friday, Hanlan opened 6% higher. Due to overall market weakness, I warned that Hanlan’s trading should focus on buying on the limit-up.

Two minutes after the open, Hanlan stabilized above the moving average but did not hit the limit-up. I told everyone to buy on dips, about 2 lots.

This is a trial-and-error position. I intended to hold 5 lots, but since Hanlan didn’t hit the limit-up and only stabilized above the moving average, I first bought 2 lots to test the waters.
Later, after additional volume, Hanlan hit the limit-up again, and I continued to buy on the limit-up as planned.

This illustrates a staged, incremental approach to buying a single stock. If Hanlan didn’t hit the limit-up and then pulled back, my loss might only be 2 lots. The core idea is to buy in parts, in stages. Currently, with widespread quant trading, some stocks can’t be entered mid-way due to large orders blocking the way. Buying a test position near the moving average is also acceptable.

From this, two points are summarized:

1. The next day’s planned targets must meet your expectations, and your positions should be entered at your pattern’s buy points.
2. Regardless of how optimistic you are, buy in batches and stages.

For stocks breaking through regulatory limits, you should add one more order on the limit-up, confirm another during the pullback, and add again during the rebound.

Even if the opening surge tricks you into a false breakout, your loss is likely limited to that initial surge order, rather than risking your entire position for a small profit at the open.

This covers position management within the trading pattern.

The same applies to exits.
You’ve probably experienced this: a stock keeps weakening, but when you sell, it suddenly surges.

As with the initial buy expectations, selling also depends on your outlook for the stock.
For example, do you expect a high open? a low open? flat? Surprising? in line with expectations? below expectations?
For stocks with high expectations, the ideal exit point is often when the stock exceeds expectations, such as the recent overperformance of Yunnan Energy (豫能). New followers can check previous articles for details.
For stocks meeting expectations, typical actions are holding steady or reducing positions.

Monitor the market sentiment of the sector: if the sector’s sentiment hits a high, and your holdings are passive follow-ons, then at that moment, it’s likely the peak of your intraday position. You can choose to reduce some positions to lock in profits, expanding your profit cushion. For example, when Hang Electric (杭电) surged and hit the limit, and Yunnan Energy (豫能) was passively rising, I advised everyone to trim positions at the intraday high to increase profits.

Looking at subsequent movements, if the stock’s moving averages hold and it pulls back without breaking support, you can continue to watch for further surges. If it breaks below the day’s moving average and fails to recover, it’s time to clear the position.

In summary:

1. If trading stocks within your pattern, gradually and incrementally increase your position, even if you lose money.
2. For stocks outside your pattern, just take small profits or cut losses—say, 100 shares or 1% of your capital—since these are mostly luck-based gains.
3. For stocks meeting expectations, hold or reduce positions gradually. For those below expectations, clear out.

The stock market is not a place to make money through reckless actions alone. Stay rational, disciplined, respect the cycle, trust common sense, and be cautious during euphoria and confident during uncertainty.

This article took about two hours to write, as I rarely write such long pieces.
Purely driven by passion, I hope followers can give a small thumbs-up. The previous article hit the target data, so I’m sharing position management tips here. I aim for 150 likes on this article, and will continue updating the trading system.
Unexpectedly, I received tips from followers upon arrival—thank you all.

@Yang Linchuan @ninggggg @Er Yue San Shi.
Thank you all for the 150 likes.