Never break your trading rules or deviate from your plan when emotions are high.
Author: kel xyz
Compiled by: Deep Tide TechFlow
Never over-leverage. Once your position 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 you are tired or sleep-deprived. Decision fatigue can destroy traders more than liquidation.
Never trade without a clear edge. Trading without a clear edge is just gambling with unnecessary steps. If you can't explain your edge in one sentence, you probably don't have one.
Never open a position out of boredom. The impulse to "do something" often leads to suboptimal returns. Many times, doing nothing is the best choice. If you find yourself opening a position just to be "busy" or because "it's been a while since you traded," reflect on it. Trading for the sake of action will only lead to hasty decisions and losses. The market rewards "the most profitable traders," not "the ones who trade the most." Sometimes, the best trade is no trade at all.
Never trade immediately after a big loss. At this point, you are prone to emotional reactions, trying to recover everything with a bad gamble. Attempting to make up for all losses at once is destined to lead to even greater losses.
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 opening a position. Remember, the last objective moment is before you place your order. Once you enter a position, it becomes difficult to admit you were wrong, so decide in advance when to stop loss.
Never become obsessed with your position. The market does not care about your beliefs. Either cut your losses or be eliminated by the market.
Never trade your profit and loss statement (PNL) — trade the market itself. Getting caught up in losses or obsessing over past profits will cloud your judgment and distort your execution.
Not all opinions are suitable for trading. The best trades often involve not trading. Preserving capital and mental focus for favorable opportunities is more important than forcing an entry.
Never trade against the trend. The power of the trend is stronger than you. Adapt to the trend, or be eliminated.
Never blindly try to catch the bottom. Cheap things can become cheaper.
Never break your trading rules or deviate from your plan when emotions are high. Rules exist for a reason — usually derived from painful experiences. When you convince yourself to ignore the rules "just this once" (like moving stop losses, adding to positions, or over-leveraging), you open the door to chaos. Discipline is sticking to the right things even when it's hard. As a trading proverb says: Plan your trade, trade your plan.
Never exhaust all your ammunition at once.
Never trade outside your comfort zone. If your position is too large, you will start making decisions based on fear, thinking the market or others are targeting you, and may even see "ghosts" that don't exist. Adjust your position size based on the quality of your sleep at night.
Never let pride prevent you from exiting a bad trade. Admit you were wrong — cut your losses, 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 present. Exits are often smaller than you think. Liquidity is determined by the market, not by you.
Never mistake randomness for strategy. Buying because the price is rising or shorting because "it feels high" is not trading; it's blind gambling. Even with good risk management, if your entry lacks basis, you will ultimately bleed out.
Never make the same mistake twice. Mistakes in trading are inevitable, but repeating mistakes is unacceptable. Never lose in the same way twice.
Never forget to defend. Making mistakes is acceptable, but continuously making them is not. Protecting capital is always the top priority. "Don't focus on making money; focus on protecting your existing capital."
Never focus solely on offense. Survival is more important than anything else. If you don't bet, you can't win. If you lose all your chips, you can't bet.
Never fall into lifestyle inflation after a big win. Problems will arise when you start predicting annual income based on a lucky trade.
Never forget to switch to defense after a hot streak. Large losses often occur after a series of victories when overconfidence begins to show. Self-examine — your last big trade was meaningless to the market.
Never let pride, ego, or overconfidence take over. Always remain humble.
Never trade in situations you cannot control. For example, Federal Reserve meetings (FOMC) events.
Never become complacent. A strategy that works in one market environment may fail in another. Trading is a skill that requires continuous improvement. Comfort is often the enemy of your profits. Don't assume you know how the market will develop. As a famous saying goes: "We have two types of predictors: those who don't know, and those who don't know they don't know." Don't assume your edge is permanent. The market is evolving, edges will disappear, and strategies that worked in the last cycle may be useless in the next. Continuously optimize, continuously test — stagnation is death.
Never continue to add to losing positions after your trading logic has been falsified.
Never trade with "certainty," but trade with "conviction."
Never assume the market "must" do something, especially based on recent patterns. The market owes you no logic or continuity. Just because the market has been rising (or falling) recently does not mean it won't suddenly reverse. Avoid using words like "certain" or "impossible" in trading. Stay flexible — anything can happen. Remind yourself: never say "it's impossible" regarding market behavior.
Never treat win rate as everything. Maximizing win rate to feel good is a trap. Taking profits too early or avoiding necessary small losses will ultimately harm profitability.
**Never underestimate the importance of discipline, patience, risk control, and execution, while placing all hopes on *excess returns*. Many traders have good alpha strategies but don't know how to apply them correctly. Good execution includes not only choosing what and how to trade but also knowing when not to trade. Sometimes, the best execution decision is not to trade, especially when conditions are unsuitable. Always ask yourself: "Do I have an edge here? Or am I just flipping a coin?" If it's the latter, leave your capital for better opportunities.
Never collapse after a big loss, or become overly excited after a big win. Emotional resilience is a trader's most powerful asset.
Never ignore price movements 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 will need them to tell you when to exit — and when they go silent, you will be in trouble. As Livermore said: "No one can make big money by following someone else's advice." Hone your skills and build your own system. If you can't trust your decisions, you are just a pawn in someone else's trade.
Never go against your intuition. If it feels wrong, it usually is.
Never try to catch every market fluctuation. Trying to capture every rise and fall in the market is foolish. Always view the market with an abundance mindset rather than a scarcity mindset — the market is always there, and there are enough opportunities for you to profit. You don't need to act 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 losing positions after your trading logic has been falsified, especially after a significant drop. The mindset of "I've lost too much to sell now" can lead you to zero.
Never let the "break-even" mentality dominate your decisions. This mentality leads to overtrading, ultimately resulting in an empty account.
Never focus solely on entry points. A trade is not complete until you exit. Knowing when to close a position is as important as knowing when to open one.
Never ignore the "boring" parts (position management, stop losses, risk/reward ratio) — these are key to surviving in the market. Don't wait until you experience catastrophic losses 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 "surface strength" — this strength is often just a lagging indicator of reality.
Never stay in or enter a position because of "hope" or wishful thinking.
Never underestimate the importance of risk management. Prioritize protecting capital over chasing profits. "Take care of your losses, and profits will take care of themselves."
Never recklessly open or close positions. Just as you build positions gradually, you should also reduce them gradually — "all in, all out" is a recipe for disaster.
Never trade in a way that you cannot 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 losses get out of control." 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 have no edge, exit. Forcing trades outside your framework will only erode your account.
Never assume your edge is permanent. The market is evolving, edges will disappear, and strategies that worked in the last cycle may be useless in the next. Continuously optimize, continuously test — stagnation is death.
Never judge the quality of a trade solely by its outcome. Good trades can sometimes lose money, while bad trades can also profit. Focus on execution, not results.
Never hold a position out of fear of looking foolish or due to public opinion. I've seen many people "die early" because they were afraid of public humiliation. Cut your losses without hesitation. The market doesn't care about your pride — and neither should you.
Never underestimate the power of leaving. If you are on a losing streak, clear your positions and take a break. Psychological capital and financial capital are equally important. The key is to break the spiral of negative emotions.
Once you return, maintain small positions and only gradually increase them after rebuilding confidence.
These lessons come from the books I've read, experiences learned from top traders, and the countless mistakes I've made along the way.
Trading is lonely; it causes pain and makes you question everything. But if I had to choose again? I would still choose trading, no matter what.
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