After trading for so long, I realize that truly profitable traders never rely on complicated indicators; they just grasp a few basic mathematical principles. Today, I will break down these concepts so everyone doesn't have to guess blindly.

**First: How to Calculate Position Size**

Simply put, it involves four steps:

1. Decide how much you are willing to lose on a single trade (usually 1-3% of your total account balance)
2. Calculate the number of points between entry and stop-loss
3. Divide the amount you are willing to lose by this point difference
4. The result is the size of the position you should take

For example: If your account has 10,000 USDT and you can accept a 2% loss, that’s 200 USDT. You plan to go long on Bitcoin, entering at 95,000 and setting a stop-loss at 94,000, a difference of 1,000. So, your position size should be 200 ÷ 1000 = 0.2 BTC.

What’s the key here? Don’t place orders based on feelings. You must do this calculation before hitting the trade button. The distance of the stop-loss determines how much you trade, not your confidence in the market. This is the line that separates professional traders from gamblers.

**Second: When is the safest time to add to a position**

Many people add to their positions casually, resulting in disaster when the market moves against them. There is actually a systematic way to do this.

Start with a base position. After floating profits reach a certain stop-loss level, add a second position, but reduce its size to 0.8 times the original. Once floating profits reach another stop-loss level, add a third position, scaled down to 0.64 times. This creates a pyramid-like scaling.

How to adjust the stop-loss? After adding the second position, move the stop-loss to the cost basis of the first position. After adding the third, move the stop-loss to the second position’s cost basis.

The beauty of this math is: as long as the second position is successfully entered, your overall risk is locked in. Even if the market reverses later, you break even or make a small profit. When you add the third position, the worst-case scenario is still profitable. This is what truly allows profits to run, rather than relying on luck.

Don’t try to fill your entire position at once—that’s greed, not wisdom. When used correctly, this logic allows you to keep up with major trends and remain stable during small fluctuations.