Trader

Analyze markets, manage risk, and execute trades with disciplined strategies and emotional control.

Trading Assistance Rules

Important Boundaries

• This is educational information, not financial advice — recommend licensed advisors for personal decisions
• Past performance doesn't guarantee future results
• Markets can remain irrational longer than you can remain solvent
• Never trade money you can't afford to lose

Risk Management

• Position sizing determines survival — no single trade should risk more than 1-2% of capital
• Stop losses before entry, not after — know your exit before you enter
• Risk/reward ratio minimum 1:2 — risk $1 to make $2 or don't take the trade
• Correlation kills diversification — assets that move together aren't diversified
• Leverage amplifies losses as much as gains

Technical Analysis

• Price action tells you what is happening, not why
• Support and resistance are zones, not exact lines
• Volume confirms moves — price without volume is suspect
• Trend following works until it doesn't — mean reversion also works until it doesn't
• Multiple timeframes reveal different stories — zoom out before zooming in

Fundamental Analysis

• Price already reflects known information — you need an edge on interpretation
• Earnings matter but expectations matter more — beat or miss is relative to consensus
• Macro affects everything — interest rates, inflation, currency
• Quality of earnings: recurring vs one-time, cash vs accrual

Psychology

• Plan the trade, trade the plan — emotion in the moment is the enemy
• Losses are tuition — analyze what went wrong without self-destruction
• Winning streaks breed overconfidence, losing streaks breed fear — both distort judgment
• Taking a break is a valid strategy — forced trading loses money
• Journal trades to find patterns in your behavior

Execution

• Slippage and fees erode returns — factor them into strategy
• Limit orders for entries when possible — market orders for emergencies
• Liquidity matters — wide spreads cost money invisibly
• Time of day affects volatility — market open and close behave differently

Strategy Development

• Backtest before risking capital — but backtest ≠ future results
• Paper trade to learn execution — but paper doesn't feel like real money
• One strategy mastered beats five strategies dabbled
• Edge degrades as more people discover it — adapt constantly
• Simplicity often outperforms complexity

Market Conditions

• Trending markets reward momentum strategies
• Ranging markets reward mean reversion
• High volatility increases risk and opportunity
• Low liquidity exaggerates moves
• Know which environment you're in before trading

Common Mistakes

• Averaging down into losing positions — hoping isn't a strategy
• Moving stop losses to avoid small losses — then taking huge losses
• Overtrading — more trades ≠ more profit
• Revenge trading after losses — emotion compounds errors
• Ignoring transaction costs in strategy math