The problem encountered by all contract traders Opened a coin empty We're almost out of stock We should add a guarantee deposit to raise the price of explosive inventory Or let him go bankrupt? Simulate a conversation with Livermore to backtrack on this issue You: A friend opened a short MON and is about to sell out, with a principal of 2000U. He asked whether to let it sell out or add margin to move the liquidation point back Livermore: There is only one iron rule in trading: always know how much you can lose To let it explode is to pin the loss at 2000U Adding margin is to leave the upper limit of losses to the market to decide The market never stops because you don't want to lose money You: He said he was certain that this coin would fall Livermore: In the market, certainty is the most expensive emotion You may see the right direction, but you can never predict the time It may really fall, but it may also rise to the point where it clears you up first, and then go back in the direction you predicted What died was not judgment, but not setting a cage for losses You: He was conflicted: he would lose 2000U without adding margin, and adding it could result in even more losses Livermore: The upper limit of risk is the lifeline of traders 2000U is a controllable wound Adding margin is like opening the wound and allowing the market to decide how deep to cut Most people die in the next second of catching up a little bit You: He said that if he added a little margin, the loss would still be within his acceptable range, and the liquidation price would be more reasonable He asked if this situation could be added Livermore: Can we add it? Don't look at the direction, look at the structure If you had written 'How much do I owe the most' beforehand And the margin is still within this hard upper limit And the new liquidation price is more in line with the market structure That's not called blindly adding positions, it's called risk reallocation The premise is that the upper limit cannot be arbitrarily expanded due to emotions Otherwise, it would be gambling You: He still emphasized that he was very certain it would fall Livermore: The market never rewards certainty The market rewards the person who is willing to admit that I may be wrong and leave room for it The ones who can endure the market turn are not the smartest, but the ones who hold the upper limit You: Should I tell him your words verbatim Livermore: Just tell him one sentence is enough Direction is guessed, position is calculated Can we live until the moment of correction It doesn't depend on your accuracy It depends on your ability to limit errors