🟡 Golden Rules of Trading
-
Preserve Capital First – Equity is your oxygen; never risk losing it all.
-
Cut Losses Quickly – Always use stop-loss; never let small losses grow big.
-
Let Profits Run – Don’t exit winning trades too early; allow trend to reward you.
-
Never Overtrade – Quality trades matter, not quantity.
-
Risk Only a Small % per Trade – Usually 1–2% of equity.
-
Trade with the Trend – “Trend is your friend” until it ends.
-
Avoid Emotional Trading – No greed, fear, or revenge trading.
-
Have a Trading Plan – Enter with strategy, not guesswork.
-
Keep a Trading Journal – Record trades, learn from mistakes.
-
Always Respect Risk–Reward Ratio – Don’t take trades with poor reward compared to risk.
-
Stay Disciplined & Patient – Sit out when there’s no clear setup.
-
Never Average a Losing Position – Adding more to a bad trade magnifies losses.
-
Continuous Learning – Markets evolve; keep improving strategies.
-
Protect Profits – Withdraw profits regularly; don’t gamble them back.
-
Trade What You See, Not What You Think – Follow the chart, not emotions or predictions.
🟡 Golden Rules of Trading [Explanation]
1. Preserve Capital First
Capital is your trading lifeline; without it, you can’t stay in the market.
A trader’s first goal is survival, not chasing profits.
Protecting capital means avoiding reckless risks and oversized positions.
If you lose too much equity, recovery becomes nearly impossible.
Think of capital preservation as your shield for long-term success.
2. Cut Losses Quickly
Small losses are manageable, but big losses can destroy your account.
A stop-loss acts as insurance against unexpected market moves.
Never hold a losing trade hoping it will turn around.
Discipline in taking losses keeps emotions under control.
Remember: protecting yourself from a big loss is more important than winning every trade.
3. Let Profits Run
Don’t exit winning trades too early out of fear.
A strong trend can give much more profit than you expect.
Patience is needed to maximize returns from good setups.
Trailing stop-loss can help lock in gains while staying in the trade.
Big profits from a few trades often cover many small losses.
4. Never Overtrade
More trades don’t mean more profits.
Overtrading increases transaction costs and mistakes.
It usually comes from boredom or greed, not strategy.
Quality setups are rare — wait for them.
Successful traders know when not to trade.
5. Risk Only a Small % per Trade
Never risk your whole capital on one trade.
A good rule is 1–2% of equity per position.
This way, even after many losses, you can survive.
Proper position sizing reduces emotional stress.
Small risk keeps you in the game long enough to win.
6. Trade with the Trend
The trend shows the market’s main direction, and it’s safer to move with it.
Trying to fight the trend often leads to unnecessary losses.
Bullish trends offer higher probability for long trades, while bearish trends warn to stay cautious.
Use moving averages or price action to identify the trend clearly.
Remember: the trend is your friend until it clearly ends.
7. Avoid Emotional Trading
Emotions like fear, greed, and anger can ruin trading decisions.
Trading should be based on rules and logic, not feelings.
Revenge trading after a loss usually leads to more losses.
Staying calm helps you follow your plan with discipline.
The best traders act like machines, not gamblers.
8. Have a Trading Plan
A trading plan defines when to enter, exit, and manage risk.
Without a plan, decisions become random and emotional.
Consistency comes from following tested strategies, not guesses.
A plan also prevents you from chasing the market.
Treat your plan like a business strategy — not a casual idea.
9. Keep a Trading Journal
Recording your trades helps identify patterns in your behavior.
A journal makes it easy to see what works and what doesn’t.
It also helps you learn from mistakes and successes.
Over time, journaling improves discipline and decision-making.
Serious traders treat journaling as a growth tool, not a burden.
10. Always Respect Risk–Reward Ratio
A good trade has higher reward potential than the risk taken.
Most traders prefer a minimum of 1:2 risk–reward ratio.
This ensures that even with some losses, profits cover them.
Taking trades with poor ratios usually leads to failure.
Risk–reward discipline separates professional traders from gamblers.
11. Stay Disciplined & Patient
Markets don’t provide good opportunities every day.
Patience allows you to wait for the right setups.
Discipline ensures you follow your rules without shortcuts.
Many losses happen when traders force trades out of impatience.
Success comes to those who wait for high-probability trades.
12. Never Average a Losing Position
Adding more to a losing trade multiplies your risk.
This often turns a small loss into a disaster.
Markets can stay against you longer than you expect.
It’s better to accept the loss and move on.
Capital protection is more important than being “right.”
13. Continuous Learning
Markets are always changing, so traders must adapt.
Studying new strategies keeps you updated and sharp.
Learning from mistakes is as valuable as learning from books.
Technology, psychology, and market conditions all evolve with time.
A trader who stops learning soon falls behind.
14. Protect Profits
Profits are not real until they are booked or withdrawn.
Don’t give back gains to the market by overtrading.
Withdrawing part of profits builds financial security.
Protecting profits maintains confidence and consistency.
Trading success is about keeping what you earn, not just making it.
15. Trade What You See, Not What You Think
Charts show reality, while predictions often show hope.
Follow price action instead of personal opinions.
Ignoring the chart because of bias usually ends in loss.
Objective trading decisions are stronger than emotional guesses.
The market doesn’t care what you think — it only shows what is.