Yunnan Province is rich in small hydropower resources， among which cascade small hydropower stations account for a large proportion of the whole small hydropower generation. These cascade small hydropower stations are daily regulating hydropower stations. There are obvious differences between the optimal operation of cascade reservoirs in the basin and the common cascade hydropower stations controlled by large regulating capacity leading hydropower stations. It is difficult to use the algorithm and model of traditional cascade hydropower stations to realize the optimization of reservoirs. Aiming at this problem， based on the research background of optimal operation of daily regulation cascade hydropower stations， the general drawing steps of multi factor cascade dispatching diagram is discussed， and the key of the steps is analyzed. Around the key factor screening of small hydropower station optimal operation， the related factors are further described. Based on the analysis process of optimal operation， taking Jinshuihe three-stage small hydropower station located in Jinping County of Yunnan Province as an example， the selection method of key factors for daily regulation hydropower station operation is discussed in depth， and the effectiveness of the method is verified by the comparison of water head and water amount benefits.