Sharing a true story and my personal trading insights, purely based on experience and not investment advice.

In the past two years, I've seen too many traders lose control immediately after entering the market—losing money and hoping to quickly recover, making dreams of tenfold gains, only to end up being washed out by the market. I once mentored a programmer buddy, 29 years old, smart but impatient. Over three months, he lost more than 60,000. During the day at work, he was mentally foggy; at night, he stayed up until dawn on his phone. When the K-line dropped, he sweated in his palms; when it rose, he impulsively added to his position. The more he traded, the more he lost, and he even fell into a state of extreme depression.

Later, I suggested he learn from the "Three-Level Position Management System" I developed through years of trading. Four months later, not only did he recover all his losses, but he also made an extra 60,000. Honestly, this method doesn't involve any advanced technical indicators or complex strategies; the key is helping him truly understand how to "hold back impulsive actions."

**Why does emotion hijack your decision-making?**

The biggest enemy for retail traders is treating trading like gambling. When fear kicks in, they panic-sell at dips, often bottoming out. Conversely, greed amplifies this—making thousands in profit, they start imagining tenfold gains, only to see profits evaporate during a pullback. The most terrifying is revenge trading: after losing, instead of reflecting, they immediately add to their position to "recoup," trapping themselves in a vicious cycle. I've seen someone place over 20 leveraged trades in one night, paying more in fees than their actual loss. All these behaviors are driven by the desire for instant gratification, completely ignoring the market's need for patience.

**The logic of the Three-Level Position Management System**

The core idea is simple: treat your capital like an army, divided into three tiers, and operate in an orderly fashion instead of going all-in at once.

The first layer is the Basic Position (40%), which acts as your ballast. No matter how volatile the market, this portion remains untouched—your long-term core holding. Its purpose is to prevent being completely trapped in extreme conditions and to keep your mindset relatively stable.

The second layer is the Offensive Position (35%), used to follow medium-term market trends. When technical signals are clear, this portion is used to build or add to positions, but within strict rules.

The third layer is the Flexible Position (25%), dedicated to capturing short-term fluctuations and oversold rebounds. This part can be traded quickly in and out, but with strict risk controls—never greedy.

The key point is: each layer has clear entry and exit rules, rather than operating based on "feelings" from the charts. What's the benefit of this approach? When you have a rule-based framework, emotional fluctuations become manageable variables. You won't impulsively add to positions when you see red, nor panic-sell when you see green. Rules make decisions for you, rather than greed and fear.

This is the core reason my friend was able to turn around from losses in four months. It wasn't that he suddenly became a technical expert, but that he finally used discipline to lock down his impulses. The market is always there, opportunities are always present, but survival comes first.