Reflections on Re-reading the Ultimate Guide to Trading for Beginners

1. Never underestimate the power of extreme simplicity

Unless there is good background and momentum, do not open a position (unless there are more than 2 consecutive large bullish or bearish candles in 5 minutes or 1 hour, there is no advantage)

2. Focus on trading only one asset

Recently, I deeply felt the essence of this sentence. Paying attention to too many things will only distract your energy. Only extreme focus can lead to extreme returns.

3. Study and practice diligently

Focus on price action, focus on patterns and structures that belong only to you, and then continuously train and summarize shortcomings.

4. Strictly control stop-loss and position size

Before achieving stable profits and avoiding large losses, only trade with money you can afford to lose—the smaller, the better. Even if you lose, it doesn’t matter. Don’t go all-in with heavy positions or add to losing trades until you’re wiped out.

5. Don’t focus on making money; focus on doing good trades

Pursue excellence, and money will naturally follow. Focus on doing the right things, and profits will come naturally. The more you focus on making money, the less you’ll make, especially in the trading world. The more you focus on profits and losses, the more it will affect your trading plans and operations. In the end, you’ll either hold losing positions or exit profitable ones too early, missing out on big trends.

6. Strictly control stop-loss to survive longer

In financial markets, there are old traders and brave traders, but there are no old, brave traders. In trading, the only thing we can control is the stop-loss amount. Everything else is beyond our control. Only by avoiding big losses, making small gains or losses most of the time, and occasionally making big gains can you achieve long-term success in trading.

7. Classify trades and focus on high-probability opportunities

Everyone knows that the rarest quality in trading is patience. The purpose of patience is to wait for high-probability, high-reward opportunities. Such opportunities are rare, but once encountered, they can double your account in a short time, far exceeding the quality of 10 or 20 trades. Therefore, learn to classify and learn to give up.

Focus on Tier 1 and Tier 2 trades, and abandon Tier 3 trades.

8. Without recording trades, you’ll never find the key to profitability

Writing trading records is very boring, but only by persistently writing and reviewing them can you truly identify and correct your problems. Otherwise, the same mistakes will repeat today, tomorrow, and in the future. If you don’t correct them, the market will repeatedly hit this fatal point until you either truly correct it or exit the market completely.