Author: kel xyz

Compiled by: Tim, PANews

Trading is lonely, painful, and a journey of constant self-doubt. The author of this article summarizes 52 "trading taboos" from mindset to strategy through reading books, learning from smart traders, and countless trial and error in the market. These rules reveal the core of trading success—discipline, patience, and risk management.

1) Never over-invest. When you start to lose your rationality, even if your judgment is correct, over-investing can lead to liquidation, which is the fastest way to bankruptcy.

2) Never trade when you are tired or sleep-deprived. Decision fatigue can end a trading career faster than forced liquidation.

3) Never trade without a clear advantage. Entering a trade without an advantage is just unnecessary gambling. If you cannot explain your advantage in one sentence, you likely do not have one.

4) Never enter a position out of boredom; frequent trading leads to poor returns. Often, sitting on the sidelines is the best strategy. If you find yourself forcing a trade just because "you don't want to be idle" or "haven't traded in a while," please reflect on yourself. Trading for the sake of trading leads to hasty decisions and losses. The market does not reward those who trade the most; it rewards those who profit the most. Sometimes, not trading is the best trade.

5) After experiencing significant losses, never continue trading. Emotions can easily spiral out of control, and you may try to recover through an irrational bet. This eagerness to recover will likely lead to even greater losses.

6) Never enter a trade without a clear exit plan. Whether based on time stop-loss, price stop-loss, failure conditions, or catalyst-driven exit strategies, these should be determined before entering a position. Remember, the last moment a trader can maintain objective judgment is before placing an order. Once in a position, admitting mistakes becomes exceptionally difficult, so it is essential to set stop-loss exit conditions in advance.

7) Avoid stubbornly holding onto your position. The market does not care about your beliefs. Either stop-loss or get cut.

8) Never trade based on profit and loss; trade based on the market itself. The urge to recover losses or dwell on past profits can cloud judgment and interfere with execution.

9) Not all opinions are worth trading on. The best trades are often no trades at all. Preserving capital and energy until conditions are favorable is more important than acting forcefully.

10) Do not fight against the trend. The tide is stronger than you. Adapt to it, or you will be eliminated.

11) Never try to catch a falling knife. "Cheap" can always become cheaper.

12) Never violate trading rules or deviate from your plan when emotionally impulsive. Your rules exist for a reason, often stemming from painful lessons learned. Once you try to convince yourself "just this once" to ignore a rule (such as moving stop-loss levels, doubling down, or trading too large a size), chaos will ensue. Discipline is doing the right thing even in tough times. As a trading adage says: "Plan your trade and trade your plan."

13) Never use all your bullets at once.

14) Never trade when you feel uneasy. If your position size is too large, you will fall into a vortex of panic decision-making, constantly imagining that the market or some force is trying to force you out, leading to a state of nervous tension. The truly smart approach is to let a good night's sleep become a natural measure of your position size.

15) Never let pride trap you in a bad trade. Acknowledge mistakes: cut losses promptly, adjust strategies, and move on.

16) Never underestimate the reflexivity of the market. Strong assets can always reach new highs, and weak assets can always reach new lows.

17) Never expect liquidity to appear when you need it. The exit channels are often narrower than you think, and liquidity is not controlled by you but determined by the market.

18) Never treat the market's random fluctuations as a trading strategy. Buying simply because prices are rising or shorting just because "the price feels too high" is not real trading but blind gambling. Even with a well-established risk control mechanism, if your entry decision lacks fundamental support, you will eventually bleed losses.

19) Never make the same mistake twice. Trading errors are inevitable, but repeating mistakes is unacceptable. Never lose in the same way a second time.

20) Never forget to defend yourself. Making mistakes is acceptable, but stubbornly holding onto errors is not. Protecting your capital should always be the top priority. Focus on protecting your existing assets rather than just thinking about making money.

21) Never focus solely on offense; staying alive is the most important. If you do not bet, you cannot win. If you lose all your chips, you cannot continue betting.

22) After a big success, never fall into the trap of lifestyle inflation. Problems arise when you start estimating your annual income based on a lucky successful trade.

23) Never forget to switch to a defensive strategy after a series of profits. Huge losses often occur after a string of victories when overconfidence begins to take hold. Stay humble; your last big trade means nothing to the market.

24) Never let pride and arrogance take over; always remain humble.

25) Never trade in situations you cannot control, such as FOMC meetings.

26) Never be complacent. A strategy that works in one market environment may fail in another. Trading is a craft that requires continuous improvement; comfort zones are often the enemy of profit and loss. Never think you can predict market direction.

"Predictors fall into two categories: those who do not know and those who do not know they do not know." Never assume your advantage will last forever. The market is evolving, advantages will fade, and methods that were effective in the last cycle may become completely useless in the next. Keep iterating your strategy, continuously validating and refining; stagnation equals self-destruction.

27) Never average down on losing positions after your logic has been disproven.

28) Do not trade with fixed expectations; trade with firm belief.

29) Never assume the market "must" operate in a certain way, especially based on recent trends. The market has no obligation to continue trends or follow logic. Even if the market continues to rise (or fall), it may suddenly reverse. Avoid using absolute statements like "certain" or "impossible" in trading. Keep a flexible mind and logic; anything is possible. Remember: never make absolute conclusions about market behavior.

30) Never view win rates as everything. Deliberately pursuing a high win rate for self-satisfaction is a trap. Taking profits too early or avoiding necessary small losses will ultimately harm profitability.

31) Never underestimate the importance of discipline, patience, risk control, and execution; these are more important than merely pursuing Alpha returns. Many traders hold quality Alpha returns but do not know how to manage them. Excellent execution is not just about choosing trading targets and strategies; it is also about knowing when to stand still. When market conditions are unfavorable, the best execution decision is often not to trade. Always ask yourself: "Do I have an advantage here, or am I just betting on a coin toss?" If it is the latter, conserve your strength and wait for a better opportunity.

32) After a big loss, never be downcast; after a big win, never be complacent. Emotional resilience is the most valuable asset for a trader.

33) Never ignore price movements after news releases. If the market reacts contrary to your expectations, exit immediately. The market is conveying information to you that you have yet to perceive.

34) Never trade with borrowed beliefs. If you buy based on someone else's advice, you will also need them to tell you when to exit, and when they go silent, you will find yourself in trouble. As Livermore said: "No one can make big money based on what others tell them." Hone your own skills and build your own system. If you cannot trust your decisions, you are merely a pawn in someone else's trades.

35) Never go against your intuition. If something feels off, it usually is.

36) Never try to catch every market fluctuation.

People are always tempted to grab every rise and fall in the market, but this approach is destined to be futile. Always approach the market with an abundance mindset rather than a scarcity mindset; it is always there, with ample opportunities to help you achieve your goals. You do not need to swing at every pitch like a batter.

37) Never underestimate the power of failure. If you persist, failing early and often will lead to continuous improvement.

38) When your investment rationale no longer holds, never stubbornly hold onto losing assets, especially after a price crash. The thought of "I've already lost so much, I can't sell now" will lead to total loss.

39) Do not let the "recoup mentality" dominate your decisions. This mindset leads to overtrading and ultimately results in total liquidation.

40) Never focus solely on entry timing. A trade is only considered complete when you exit. Knowing when to cash out is as important as knowing when to enter.

41) Never overlook seemingly "boring" aspects (position management, stop-loss setting, risk-reward ratio); they are key to your standing in the market. Do not wait until you face catastrophic losses to understand this.

42) Do not trade for momentary excitement; aim for steady and solid victories.

43) Never fall into the illusion of overwhelming power; that is often just a lag in reality.

44) Never stay in a situation because of "hope" or wishful thinking.

45) Never underestimate the importance of risk management. Always prioritize the safety of your principal over chasing profits. Manage your losses, and profits will follow.

46) Never enter or exit trades recklessly. Just as you gradually build a position, you should also gradually reduce it; "all in, all out" is tantamount to self-destruction.

47) Never make bets you cannot afford to lose. The size of any single trade should not be so large that it forces you out of the market. The most important advice is to never let losses spiral out of control. Even after making 20 or 30 consecutive mistakes, you should still retain some capital. Never let a single position jeopardize your trading career.

48) Never trade outside your area of advantage. If you have no advantage, choose to stay on the sidelines. Forcing trades outside your trading system will only lead to gradual depletion of your account funds.

49) Never assume your advantage is permanent. The market is evolving, advantages will fade, and effective strategies from the last cycle may become useless in the next. Continuously improve and test; stagnation equals self-destruction.

50) Never judge a trade solely by its outcome. Good trades can sometimes result in losses, and bad trades can occasionally yield profits. Focus more on execution than on results.

51) Never hold onto a position out of fear of looking foolish or concern for public opinion. I have seen too many people prematurely end their prospects out of fear of public embarrassment; decisive stop-loss is the way to survive. The market does not care about your pride, and you should learn to let go of your ego.

52) Never underestimate the power of temporarily stepping back. When you are on a losing streak, decisively liquidate and take a moment to regroup. Psychological capital is as important as financial capital; the key is to break the vicious cycle of negative emotions. Upon returning, stay low-key, simplify your scale, and wait to regain confidence before increasing your bets.

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