What is the most common reason for a failed contract trade? It often comes down to poor position management, always trying to go all-in and turn things around with a single shot. Today, I’ll share a relatively conservative position allocation approach for reference only.

Suppose you have $1200 in your account and allocate $400 for contract trading. How should you distribute this $400? The core logic is: the actual funds used to open positions should be small, and the remaining part should be used to place take-profit and stop-loss orders.

The specific plan is as follows: at an entry price of $33, you only invest $100 as actual opening capital. Why? Because the remaining $300 needs to serve as margin reserve.

Then, place orders of $33 each at positions of ±200% and ±350%—one for moderate profit-taking and one for more aggressive profit-taking. What are the benefits of this approach? You don’t need to monitor the market constantly, and the risk is also diversified.

The key is to ensure that the maximum margin used does not exceed $300, so even if the market moves against you, you have enough buffer space. In simple terms, position management is about surviving longer; the premise of making money in the market is to avoid losing money first.