The success or failure of contract trading relies 30% on technology and 70% on mindset. Many people clearly master strategies like moving averages and the Donchian Channel, yet they still face liquidation. The core reason is a collapsed mindset—chasing highs and cutting losses, holding onto losses stubbornly, and panicking when profits arise. To cultivate a trading mindset as steady as Mount Tai, it doesn't require talent; it relies on rule constraints + cognitive upgrades + deliberate training. These five iron rules will help you eliminate emotional trading.
1. First, accept that 'losses are the cost of trading' and give up on 'pursuing a 100% win rate.'
The most common mindset problem that beginners face is treating 'losses' as failures, feeling guilty and anxious after losing, and even wanting to overinvest to recover losses.
But the truth is: no trading system can achieve a 100% win rate; even top traders have over 40% of trades that are losses.
What you need to do is not 'avoid losses', but 'control losses'—for example, a single loss should not exceed 1%-2% of total capital, treating each loss as 'a small amount paid to earn big money'.
For example: with a capital of 1000 yuan for contracts, set a stop-loss of 20 yuan per trade. Even if you lose 5 times in a row, you will only lose 100 yuan, and the remaining 900 yuan can still be used to catch a big market movement.
Mindset mantra: losses are costs, not failures; small losses are for the sake of avoiding big losses.
Second, replace 'emotional decision-making' with 'mechanical rules' to eliminate last-minute changes.
The root cause of a broken mindset is that trading lacks clear rules and relies entirely on 'feelings'—seeing the market rise and being unable to resist chasing, and holding onto losing trades with the hope of 'waiting for a rebound'.
The approach of experts is: write down all rules before entering the market and execute them like a robot during trading, leaving no space for greed and fear.
Specifically, these 4 points must be fixed:
1. Entry rules: must meet the 'triple resonance' (for example, a golden cross of moving averages + breakthrough of key levels + increased volume); if one is missing, do not enter the market.
2. Position rules: single product position not exceeding 10%, leverage not exceeding 3 times; even if the signal is tempting, never increase leverage or go all in.
3. Stop-loss rules: set the stop-loss order at the time of entry, and close the position immediately if the stop-loss level is breached, regardless of whether the market will rebound later.
4. Take profit rules: reduce position by 50% when reaching a 1:2 risk-reward ratio, and close all when reaching a 1:3 ratio; do not be greedy to 'sell at the highest point'.
Core logic: rules are used to constrain the mindset; you are not trading the market, but trading your own rules.
Third, when making money, 'take profits in batches'; when losing money, 'never add to positions'.
Two mindsets are most likely to ruin trading:
- Greedy mentality: earned 500 yuan, wants to earn 1000 yuan, but the market reverses, not only losing profit but also capital;
- Gambler's mentality: lost 200 yuan, wants to add to the position to average down, but ends up losing more, turning a 200 loss into a total loss.
Corresponding mindset training techniques:
1. Take profits in batches: for example, when profits reach twice the stop-loss, first reduce the position by half to take back the 'cost', and use a trailing stop for the remaining position to capture trends; even if the market reverses, you will not lose capital, and the mindset will naturally remain calm.
2. Never add to losing trades: adding to losing positions is essentially 'betting more capital on an uncertain rebound', which is the most fatal gambler's mentality. Remember: the sooner you close a losing position, the smaller the loss.
Fourth, 'mandatory review' after trading, turning every operation into 'nutrients for the mindset'.
Many people finish trading without managing it; they attribute profits to their skill and blame losses on unfavorable market conditions, which will never cultivate a good mindset.
The correct approach is: write a review log after each trade, clarifying 'whether this operation relied on rules or luck, and where the mindset broke down'.
The review log should include 3 questions:
1. Are you strictly following the rules? (for example, closing positions before reaching the stop-loss level or opening positions without meeting the entry conditions)
2. Where are the points of mindset fluctuations? (for example, panicking when making profits, enduring losses, and wondering why you thought that way at the time)
3. How to improve next time? (for example, next time when achieving a 1:2 risk-reward ratio, enforce position reduction to avoid greed)
The essence of reviewing trades is to transform emotional mindset issues into rational rule issues; the more you practice, the more stable your mindset will naturally become.
Fifth, control trading frequency; do not turn 'trading' into 'gambling'.
Beginners always want to 'catch every market movement', trading dozens of times a day, resulting in frequent stop-losses and an increasingly broken mindset.
Remember: in contract trading, you earn from 'trending money', not 'volatility money'.
Real opportunities may only occur 1-2 times a week; most of the time, the market is in a volatile state, and forced trading will only add to losses.
You can set a 'trading frequency rule' for yourself: for example, a maximum of 2 trades per day, and stop trading for the day after two consecutive losses. Never open a position just because 'your hands are itchy'.
When in a flat position, read books or review old trades; do not stare at market fluctuations— the longer you stare, the more likely you are to be led by emotions.
Finally, a reminder: the core of mindset training is 'controlling your hands'.
The mindset in contract trading is never 'endured', but rather 'constrained by rules'.
When you hand over each operation to rules rather than emotions, you will find that making money is just a natural result, and the mindset will also become incredibly calm.
The difference between experts and beginners is never about who has better skills, but who can stop when greedy, be firm when fearful, and stay clear-headed when lucky.
The content is for reference only and does not constitute investment advice!
