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01. Controlling Gambling Mentality, Protecting Capital, and Following Trading Discipline

1.1 Capital Protection Is the Primary Goal for Beginners

Capital is the lifeline of trading: For beginners, excessive losses can lead to the inability to continue trading, so the top priority is to protect capital rather than chase high profits.
Recovering from losses is harder: A 50% loss requires a 100% gain to break even, making it significantly harder to recover once capital is reduced.
✅ Set a stop-loss point (e.g., 5%-10%) and strictly enforce it.
✅ Control position sizing, avoiding excessive bets in a single trade.

Knowing what to do (knowledge) and actually executing (action) are two different things: Many traders understand the need for risk control but still trade impulsively, leading to losses.
Market sentiment can heavily influence decision-making: Greed and fear often cause traders to make irrational decisions, leading to common mistakes such as chasing highs and panic selling.
✅ Use a trading plan: Define buying, selling, and stop-loss strategies and stick to them.
✅ Keep a trading journal: Analyze mistakes, learn from losses, and improve execution.

High risk: Going all-in means having no reserved funds, leaving no room for adjustment if the market reverses suddenly.
Missed better opportunities: If all capital is committed to one trade, there is no flexibility to capture new market changes or superior opportunities.
Affects trading mindset: Full positions make traders overly emotional—afraid to take profits too early when rising, and panicking when falling.

Prevent Fear of Missing Out (FOMO):
- This mentality can lead to impulsive trades, ignoring real buy signals and reasonable price zones.
- Observe market trends after selling. Confirm the trend before deciding whether to repurchase to avoid emotional trading.
Wait for a reasonable pullback or support level:
- A price increase does not mean it will not pull back. The market often undergoes short-term fluctuations or retests support levels before continuing an upward trend.