Author:kel xyz
Compiled by: TechFlow
Never over-leverage. Once your position size is too large, your rationality will be consumed by emotions. Even if your judgment is correct, over-leveraging leading to liquidation is the fastest path to destruction.
Never trade when fatigued or sleep-deprived. Decision fatigue can destroy traders more than liquidation.
Never trade without a clear edge. Trades without a clear edge are just gambling with extra steps. If you cannot explain your edge in one sentence, you likely don't have one.
Never open positions out of boredom. The urge to "do something" often leads to suboptimal returns. Many times, doing nothing is the best choice. If you find yourself opening positions just to "stay busy" or because "it's been a while since I traded", reflect on it. Trading for the sake of activity will only lead to hasty decisions and losses. The market doesn't reward the "most active trader", it rewards the "most profitable trader". Sometimes, the best trade is no trade.
Never trade immediately after a large loss. At this point, you are likely to be emotional, trying to recoup everything with one disastrous gamble. Attempting to make up for all losses in one go is doomed to make you lose even more.
Never open a position without an exit plan. Whether it's a time-based stop loss, price stop loss, invalidation point, or event-driven exit plan, define it before entering. Remember, the last objective moment is right before you place the order. Once in a position, it becomes difficult to admit you were wrong, so decide on your stop loss in advance.
Never be married to your positions. The market doesn't care about your convictions. Either take the loss or be eliminated by the market.
Never trade your P&L - trade the market itself. Obsessing over losses or being trapped by past profits will cloud your judgment and distort your execution.
Not all views are worth trading. The best trades are often no trades. Preserve capital and mental focus for favorable opportunities, rather than forcing entries.
Never fight the trend. The power of the trend is stronger than you. Adapt to the trend, or be eliminated.
Never blindly buy the dips. Cheap things can get cheaper.
Never break your trading rules or deviate from your plan when emotionally charged. The rules exist for a reason - usually learned from painful experience. When you convince yourself to ignore the rules "just this once" (e.g., moving your stop, adding to a position, or over-leveraging), you open the door to chaos. Discipline is doing the right thing even when it's hard. As the trading adage goes: Plan the trade, and trade the plan.
Never expend all your ammunition at once.
Never trade outside your comfort zone. If your position size is too large, you'll start making fear-based decisions, feeling the market or others are against you, and even seeing "ghosts" that don't exist. Adjust your position size based on your quality of sleep at night.
Never let pride prevent you from exiting a bad trade. Admit you were wrong - take the loss, reset, and move on.
Never underestimate the reflexivity of the market. Strength can become stronger, and weakness can become weaker.
Never assume liquidity is always there. The exit is always smaller than you imagine. Liquidity is not determined by you, but by the market.
Never mistake randomness for a strategy. Buying because the price went up, or shorting because you "feel it's high", is not trading, it's blind gambling. Even with good risk management, if your entries are not based on an edge, you will eventually bleed out.
Never make the same mistake twice. Trading errors are inevitable, but repeating them is unacceptable. Never lose the same way twice.
Never forget to defend. Mistakes are acceptable, but persistent mistakes are not. Protecting capital is always the priority. "Don't focus on making money; focus on protecting the capital you have."
Never focus only on offense. Survival is more important than anything. If you don't have chips, you can't play. If you lose all your chips, you can't play.
Never let life inflate after a big win. The problem starts when you begin to predict your annual income based on a single lucky trade.
Never forget to shift to defense after a hot streak. Large losses often occur after a series of wins, when overconfidence starts to emerge. Examine yourself - your last big trade was meaningless to the market.
Never let pride, ego, or overconfidence gain the upper hand. Always maintain humility.
Never trade what you cannot control. For example, FOMC events.
Never be complacent. A strategy that works in one market environment may fail in another. Trading is an art that requires continuous improvement. Comfort is often the enemy of your profitability. Don't assume you know how the market will unfold. As the saying goes, "There are two types of forecasters: those who don't know, and those who don't know that they don't know." Don't assume your edge is permanent. The market is evolving, and edges disappear, and strategies that worked in the last cycle may be useless in the next. Keep optimizing, keep testing - stagnation is death.
Never add to a losing position after the logic has been disproven.
Never trade with "certainty", but with "conviction".
Never assume the market "must" do something, especially based on recent patterns. The market doesn't owe you any logic or continuity. Just because the market has been going up (or down) recently does not mean it won't suddenly reverse. Avoid using words like "definitely" or "impossible" in your trading. Stay flexible - anything can happen. Remind yourself: never say "never" about market behavior.
Never treat win rate as everything. Maximizing win rate for the feel-good factor is a trap. Taking profits too early or avoiding necessary small losses will ultimately hurt profitability.
Never underestimate the importance of discipline, patience, risk control, and execution, while relying solely on outsized returns. Many traders have great alpha strategies, but don't know how to properly apply them. Good execution includes not only choosing what to trade and how to trade it, but also choosing when not to trade. Sometimes, the best execution decision is no decision, especially when conditions are not favorable. Always ask yourself, "Do I have an edge here? Or am I just flipping a coin?" If the latter, keep your capital for better opportunities.
Here is the English translation:
Never collapse after a big loss, or get overly excited after a big win. Emotional resilience is the trader's greatest asset.
Never ignore the price trend after news. If the market's reaction is contrary to your expectations, exit immediately. The market is telling you something you haven't seen.
Never trade based on someone else's beliefs. If you buy based on someone else's advice, you still need them to tell you when to exit - and when they're silent, you'll be in trouble. As Livermore said, "No one can consistently make money by simply following the tips or advice of others." Hone your own skills and build your own system. If you can't trust your own decisions, you're just a pawn in someone else's trade.
Never go against your instincts. If it doesn't feel right, it's usually not right.
Never try to catch every market fluctuation. Trying to capture every rise and fall in the market is a foolish endeavor. Always approach the market with an abundance mindset, not a scarcity mindset - the market is always there, and there are enough opportunities for you to profit. You don't need to be in the market every time.
Never underestimate the power of failure. Early failures and frequent failures (while staying in the game) are the secrets to becoming better.
Never hold a losing position after your trading logic has been disproven, especially after a significant decline. The "I've lost too much to sell now" mentality will lead to a complete wipeout.
Never let the "get even" mentality dominate your decisions. This mindset leads to over-trading and ultimately, an empty account.
Never focus only on the entry point. A trade is not complete until you exit. Knowing when to take profits is as important as knowing when to enter.
Never ignore the "boring" parts (position management, stop-loss, risk/reward ratio) - these are the keys to surviving in the market. Don't wait until you've experienced a devastating loss to learn this lesson.
Never trade for the adrenaline rush. The goal of trading is to win, not to seek thrills.
Never fall for the illusion of "superficial strength" - this strength is usually just a lagging reflection of reality.
Never stay in or enter a position due to "hope" or wishful thinking.
Never underestimate the importance of risk management. Prioritize capital preservation over profit-chasing. "Take care of your losses, and the profits will take care of themselves."
Never recklessly open or close positions. Just as you build positions gradually, you should also unwind them gradually - "all in, all out" is a recipe for disaster.
Never take trades you can't afford to lose. No single trade should be large enough to force you out of the market. "The most important advice is to never let your losses get out of hand." You should be able to be wrong 20 or 30 times in a row and still have enough capital. Never let a single position jeopardize your trading career.
Never trade without an edge. If you don't have an edge, step aside. Forcing trades outside your framework will only erode your account.
Never assume your edge is permanent. The market is evolving, and edges disappear. Strategies that worked in the last cycle may be useless in the next. Continuously optimize and test - stagnation is death.
Never judge the quality of a trade solely by its outcome. Good trades can sometimes lose money, and bad trades can sometimes win. Focus on execution, not results.
Never hold on to a position out of fear of looking foolish or due to public opinion. I've seen many people "die on the hill" early due to fear of public humiliation. Cut your losses without hesitation. The market doesn't care about your ego - and neither should you.
Never underestimate the power of stepping away. If you're on a losing streak, close your positions and take a break. Psychological capital and financial capital are equally important. The key is to break the negative momentum spiral.
Once you return, maintain small positions, and only gradually increase them as you rebuild your confidence.
These lessons come from the books I've read, the experiences I've learned from top traders, and the countless mistakes I've made along the way.
Trading is a lonely pursuit, it's painful, and it makes you question everything. But if I had to choose again? I would still choose trading, no matter what.
