The Ultimate Guide to Trading

If you finish reading this content, the way you view trading will be completely changed.
Before we officially begin, I want to share a heartfelt message with everyone — this is very important and will set the tone for the entire discussion:
The kind of person you are determines the stage of trading you're in, and no matter your current situation, I want to tell you:
It doesn’t matter
.
Whether you're a beginner with little starting capital, a "seasoned loser" who has been trading for years but keeps losing, or a trader struggling year after year on the break-even line and about to give up—no matter which country you're in or what circumstances you face, as long as you can see this content today, none of that matters.
What truly matters is the next step you take.
Because the market is the purest trading ground—it doesn’t care who you are, what you’ve done in the past, which school you graduated from, or your family background. It only rewards those who truly put in the effort.
When I first started, my account had ample funds, but I lost everything and went completely bankrupt. I had to start over with just a few thousand dollars and fought my way back. My wife came from the poorest country in the EU, and when she first arrived, her bank account had only 7 euros—no joke—but she also managed to stand her ground.
Everyone’s trading journey is unique, but for you right now, the only thing you should care about isn’t "where you are, who you are, or what you’ve done," but "what you’re going to do next."
Alright, let’s get to the point. Here are today’s 5 core principles:
Principle 1:
Never underestimate the power of "extreme simplicity"
To consistently make profitable trades, you need far less information than you think.
You don’t need dozens of indicators cluttering your charts, you don’t need to chase flashy new tools in the market, you don’t need to master economics or monetary policy, and you certainly don’t need to understand every little thing happening in the market.
To become a consistently profitable trader, all you need is one "simple edge"—yes, just one!
In the entire trading ecosystem, this small edge is your "exclusive territory," and you’ll become the master of this domain. From now on, every day when you wake up, all you need to do is
refine and persistently apply this edge
, unwavering until death. Anything unrelated to this edge is irrelevant to you—it’s just noise distracting your attention.
Over the past 20+ years, I’ve made millions of dollars by doing one "simple, sure-win trade" every day. After 26 years in this industry, there’s still so much I don’t understand about the market—but that’s okay. I don’t need to, and neither do you.
Specific advice for different traders:
Beginners
: Don’t touch indicators at the start! First, focus on understanding the core basics:
Price Action: Focus on the patterns of candlestick movements—no need for complex tools.
Support and Resistance: Simply put, these are the "floor" and "ceiling" where prices repeatedly rise and fall.
Box Theory: View price fluctuations as "boxes" and understand the logic of support and breakouts within them. Only after mastering these basics should you consider adding indicators.
Experienced but unstable traders
: Try removing distracting information from your charts,
return to the essence
—understand the logic behind stock and asset movements, how price action works, the core of support/resistance, and the application of Box Theory.
Remember: In the market,
"dumb simplicity" always wins
.
Principle 2:
Focus on trading only one asset
Just as Principle 1 says, "be the master of your own territory," you also need to become an "expert" in one (or a very few) assets.
The reason is simple: The same group of traders often repeatedly trade the same type of asset, and these traders have fixed habits and behavioral patterns. Once you can figure out these "tricks" and integrate them into your strategy, your trading skills will level up directly.
This is especially useful for beginners and struggling traders: It helps you
focus your attention
. No need to scan hundreds of stocks daily or chase every hot trend—just focus on one area. When "focus" combines with "deep understanding" of the asset, you’ll achieve a qualitative leap.
Advice: Start with one asset, then slowly add 1-2 more. Honestly, trading just 3-4 tools in your lifetime is enough—
keep it boring, keep it simple, focus on one asset
.
Principle 3:
"Screen time" is your best partner
The market is like a movie—this analogy is spot-on:
The first time you watch a movie, you think, "Wow, so many exciting scenes," and you might even share it with others. But when you watch it a second time, you notice details you missed before. Imagine watching the same movie 2,000 days in a row—wouldn’t you become a "master" of that movie? You’d know all its flaws, all the overlooked lines, and could even recite the entire plot in your sleep—that’s the core logic.
The key to mastering trading is
deep, repeated immersion in one domain
.
Luckily, most brokerage accounts now have a "replay function" (historical market playback). When I started, this wasn’t an option—I had to watch the market in real time. So now, when you’re off work or have free time, skip Netflix or sitcoms, sit at your computer, and
repeatedly replay the market movements of your chosen asset
.
You’ll be amazed: Your eyes will quickly pick up price patterns, your brain will gradually grasp the underlying tricks, and these fragments will connect—your strategy will naturally evolve.
So remember:
"Screen time" (repeated review and watching the market) is always your best partner
.
Principle 4:
"Position size" is also your best partner
If you’re a beginner or have been struggling with trading, you
absolutely don’t qualify to trade with "large positions"
.
Put yourself in this mindset: When you haven’t fully mastered your strategy, don’t understand the asset you’re trading, and have never had consistent profits in your trading career, why would you risk your hard-earned money? It makes no logical sense, right?
I’m not blaming anyone—20+ years ago, I did the same thing: traded heavily without knowing anything and blew up several accounts. In reality, traders don’t lose accounts because of "one bad trade" but because of "over-leveraging on bad trades, not cutting losses, adding more leverage, until the money is gone".
So, at the start, you must control your position size—remember, you’re still in the "learning phase."
Many ask: "What’s the right position size?"
The answer:
Your position should be small enough that you feel zero anxiety or over-focus on the trade
.
For example: If buying 100 shares of an asset makes you nervous, anxious, and constantly watching the market for ups and downs, that position is too big. Reduce it to 70 shares. If you’re still anxious, go to 50, 40, 30, 10, or even 5 shares—until you’re completely unconcerned about the position size.
Doing this lets you hold winning trades longer, focus more on executing your strategy, and makes the entire trading process much smoother.
So:
"Position size" is also your best partner
.
Principle 5:
Don’t focus on "making money," focus on "making good trades"
I know this is hard—after all, everyone trades to make money, but **"making money" must never be your core goal**.
Your core goal should be: Either focus on the trade you’re currently in or the trade you’re about to make. Everything else is irrelevant.
Here’s an analogy: NFL teams don’t think, "We need to score on every play." Instead, they focus on "executing each play well"—one play at a time. When enough "good plays" stack up, touchdowns (profits) happen naturally.
Trading is the same: Make one good trade, then the next, then the next. These good trades will accumulate, and the financial rewards will follow.
A proven key trick:
On trading days,
never look at your "P&L (Profit and Loss) statement"
—never!
The reason is simple: One day, the numbers you see will trigger emotional reactions—they’ll make you deviate from your current strategy and lead to serious mistakes. Sooner or later, this number will affect you, and you don’t need that distraction.
So remember: Don’t think about "making money" every day. Just focus on "executing your trading process, following the rules, sticking to the strategy," and making one good trade at a time—you’ll go much further than you think.
The logic of trading success is simple: Use a "simple strategy" to focus on a "single asset," refine skills through "repeated review," control risk with "reasonable position sizes," and focus on "making good trades"—implement these principles, and you’ll find consistent profits aren’t that hard.
Bookmark this article and check before your next trade: Did I overcomplicate my strategy? Is my position size making me anxious? Did I check my P&L today?
Stick with it for 3 months, and you’ll see the difference.
Principle 6:
Learn to love losses, but only accept "acceptable losses"
Losses aren’t your friends, but they must become your "unavoidable lovers"—because in trading, the number of losses you’ll experience will far exceed your imagination. But remember:
There are two types of losses: ones to endure and ones to eliminate
.
Acceptable losses: The "necessary cost" of trading
This is like operational expenses in business—completely normal. For example, you see an A+ trade signal, follow the rules, execute the plan, and get stopped out due to random market fluctuations—that’s an acceptable loss. It’s not your fault; it’s just the "admission fee" to capture bigger profits. A simple analogy: To work a 9-5 job, you need professional attire—that’s a "loss." Commuting and gas are also "losses"—but these costs help you earn a salary. As long as costs are lower than returns, they’re reasonable. Same in trading: If the loss is "by the rules," don’t overthink it—just accept it.
Unacceptable losses: The "fatal flaws" to eradicate
These losses are entirely due to human errors: Revenge trading (losing and immediately trying to win back by blindly adding positions), emotional trading (entering based on feelings, ignoring signals), blindly following "gurus" (trading without research)—these behaviors are suicidal in trading. Remember: Trading is about "winning more than losing less." Acceptable losses are part of "small losses," while unacceptable losses lead to "big losses" that destroy accounts. Learning to distinguish the two means you’re halfway to success.
Principle 7:
Without trade grading, profitability is hard even with effort
Every trader needs an "opportunity grading system"—even if two charts have identical technical patterns and signals, they could be entirely different opportunities. Grading helps you
focus on high-probability trades and avoid low-win-rate traps
.
I use a "1-2-3 grading" system—beginners can copy it directly:
Grade 1 trades: Must-do "high-win-rate opportunities"
Win rate >85% (no absolute guarantee, but historically supported), perfectly aligned with your core strategy—all conditions match. These trades warrant taking reasonable risks (e.g., slightly larger positions) because they’re your "main profit drivers."
Grade 2 trades: Doable "steady opportunities"
Win rate 70%-75%, good signals but minor flaws (e.g., weaker support, slightly off timing). You can enter, but control leverage and position size—don’t get greedy, take profits early.
Grade 3 trades: Never-touch "junk opportunities"
Win rate barely over 50%, mostly "looks like an opportunity but lacks logic." I used to take these trades impulsively, only to realize they wasted time and capital—better to wait for Grade 1 or 2 opportunities with higher win rates and profit ratios.
Without grading, you’ll mistake "junk" for "must-do" trades and gamble heavily, or treat "high-win-rate" trades as "ordinary" and miss them with small positions—grading isn’t complexity; it’s a tool for "precision."
Principle 8:
Without trade records, you’ll never find the key to profitability
Grading requires "record-keeping"—if you don’t log every trade, you’ll never know where you lose or win. A trading journal isn’t a "diary" but your "problem diagnosis" and "profit manual."
The core role of records: Reveal your real issues
When I started, I kept losing mysteriously, thinking it was "bad stock picks." Only after logging every trade—symbol, entry time, signal type, emotions, exit reason—did I realize 60% of losses were due to "panic exits" (exiting good trades early out of fear, not stock selection. Without records, you’ll guess "where you went wrong"; with records, data shows the truth.
What to log (beginners, copy this):
Basics: Symbol, entry/exit price, position size, P&L amount;
Core logic: Why enter (which signal, which grade), why exit (stop-loss/take-profit/emotional reason);
Emotional state: Calm, greedy, or panicked at entry;
Improvements: What you did right, what to optimize.
Tip: Focus on one improvement weekly (e.g., "better exits," "position control"), write it on the journal’s front page, and remind yourself during trades—slowly, your system will improve.
Principle 9:
Set ironclad rules to block your "worst enemy"—yourself
In trading, the biggest enemy isn’t the market or "big players"—it’s you. Greed, fear, and 侥幸心理 will make you violate your strategy and destroy profits. Rules are your "firewall" against self-sabotage.
Two "life-saving rules" I’ve used for 20 years (beginners, copy these):
3 straight losses? Stop immediately
If you lose 3 trades in a row, your mindset is off, or your strategy doesn’t fit the market. Don’t "revenge trade"—exit, rest for a day. Even if you see perfect signals later, don’t trade. Forcing trades worsens losses; stepping back lets you move forward better.
Set a "GTFO number" (loss limit)
"GTFO" means "get the heck out." Set a daily/weekly max loss (e.g., 2% of account). Once hit, stop trading—no exceptions. This is your last line of defense against "blowing up"—remember, surviving lets you recover.
Rules don’t "limit profits"—they "prevent ruin." Trading is a marathon, not a sprint. Lasting long enough lets big profits come.
Final thoughts
Trading success is simple: A "simple strategy" focused on "one asset," refined through "repeated review," with "sane position sizes," accepting "small losses," seizing "high-probability chances," and constrained by "rules"—do this, and consistency isn’t hard.
Bookmark this. Before trading, ask: Is this trade graded? Is this loss acceptable? Did I log it? Did I break rules? Stick for 3 months—you’ll see changes.

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