The Five Survival Wisdoms for Short-Term Traders: From "Gambler" to "Hunter" The Path of Progression

Many beginners, upon entering short-term trading, think it's a "quick way to make money and very exciting," believing that quick reactions and good skills can help them "cut leeks" in the market. But after some time of navigating the market, they realize a harsh truth: short-term trading has the highest淘汰率 among all trading methods, and few can survive long-term. Those who do survive rely not on being overly smart, but on knowing what not to do and maintaining strong discipline. Today, let's discuss the five essential survival wisdoms for short-term traders to help you avoid the pitfalls that have caused many to fail.

1. Control Losses First, Talk About Making Money Later

In short-term trading, the primary goal is never how much you can earn, but to avoid being kicked out by a single uncontrolled loss. Many beginners get this order reversed—they focus daily on "how much can I make this trade," but rarely consider "if I lose, what's the maximum loss I could face."

Short-term trading involves high frequency and quick feedback. A wrong judgment once isn't terrifying; what's scary is a large, uncontrolled loss. You'll find that many short-term accounts don't gradually lose value—they are wiped out in one emotional moment, losing months of profits or even the principal.

Here's a quick calculation: a 10% loss requires an 11.1% gain to break even; a 50% loss requires doubling to recover. This illustrates the saying "losing money is like a landslide, making money is like pulling silk." There's also the "Crocodile Law," like a crocodile biting your foot—you have only one way out: sacrifice that foot. In trading, this means you must cut losses when needed, without holding onto the hope of "waiting for a rebound," which can turn a short-term trade into a long-term investment, transforming a trader into a "shareholder," and eventually into a "boss" (by constantly adding positions).

True survival wisdom is "ironclad discipline on stop-loss." Entering the market, you must understand stop-loss first; it's more important than take-profit. Short-term trading isn't about who predicts correctly, but about who loses less when mistakes happen. Everyone must accept that they will make mistakes; the difference is that some can recover, while others are eliminated after one mistake.

Therefore, in short-term trading, always prioritize "maximum single trade loss." No position should exceed 5% of your total capital. Set your stop-loss before entering, and close the position when hit—no excuses. Stop-loss isn't admitting you're wrong; it's protecting your capital. This is a habit crucial for long-term survival.

2. Habit of Doing Nothing Most of the Time

Many believe short-term trading requires frequent operations, jumping in at every market move, feeling anxious if not trading. But the truth is quite the opposite: traders who survive long-term spend most of their time "doing nothing"—screening opportunities, analyzing the market, patiently waiting.

Price movements don't necessarily mean trading opportunities. The market offers countless seemingly good entry points daily, but most are designed to drain your emotions and patience. If you're trading cryptocurrencies 24/7, can you stay in fighting shape all the time? Obviously not.

Many losses aren't due to wrong market judgment but because traders force short-term trades in unsuitable conditions. Like crocodiles in nature, they often lie still by the water, waiting for the perfect moment. When prey enters range, they strike instantly, killing with one hit.

Similarly, most of the time, the market is "garbage time," and truly high reward-to-risk opportunities are rare. Frequent trading has two downsides: first, transaction fees and slippage eat into profits, like working for the exchange; second, it dilutes focus, wasting energy on bad markets. When a big trend arrives, you may lack the energy or bullets to capitalize.

Thus, savvy short-term traders know which markets suit them and which are just noisy and risky. They dare to hold cash and do "nothing" because they understand that "not trading" is a skill. Remember, you don't need to force trades constantly; resisting unnecessary operations already puts you ahead of most.

3. Don't Let Emotions Destroy Your Account

The cruelest aspect of short-term trading is how it amplifies human weaknesses. Due to its fast pace and quick feedback, a successful trade can make you euphoric, while a loss can trigger immediate frustration. Many people don't lose to the market—they lose to their emotions, such as impatience, anxiety, stubbornness, or the desire to prove themselves.

Especially after several small losses in a row, the urge to "win it back" becomes intense. Traders start to operate recklessly, lowering standards, making trades they shouldn't. The biggest danger isn't big losses but emotional outbursts that they don't realize.

Beware of two deadly emotions: revenge trading and the God-like illusion.

Revenge trading is the main culprit behind retail traders' big losses. For example, losing a trade in the morning, feeling resentful, and then, out of rationality, wanting to "recover" by doubling down, regardless of the situation—like a gambler with a losing streak—often results in even bigger losses or liquidation.

The God-like illusion occurs when traders make a few successful trades and start to believe they are "trading gods," ignoring risks, increasing leverage, and fantasizing about turning everything around. Arrogance leads to big losses.

Survivors in short-term trading are not emotionless, but they know when their emotions are no longer suitable for trading. Never make trading decisions when overly emotional; otherwise, the cost can be severe. When you feel "overheated," turn off your devices, take a break, and wait until your emotions settle before resuming.

4. Treat Short-Term Trading as a Profession, Not "Gambling" for Excitement

Many pursue short-term trading for the thrill of "betting," watching candlesticks and account balances fluctuate, like gambling in a casino, chasing dopamine rushes. But if you approach trading with this mindset, it's better to stop early.

Short-term trading appears lively but is actually very "draining" over the long run. You must endure uncertainty, losses, and market "slaps" repeatedly. Trading based on excitement, tension, or gambling instincts won't lead to long-term success.

True professional short-term traders treat it as a career, not entertainment. They don't seek stimulation or "prove themselves," nor do they hope for a "big turnaround" in one shot. Instead, they pursue steady rhythm, repeatable decisions, and long-term manageable risks.

Excellent professional traders often lead monotonous lives. Most of their time is spent thinking and analyzing, even when not trading—they keep the market in mind. When in trading mode, they act like factory workers tightening screws—treat trading as a serious job, free from emotional influence, operating robotically according to rules. Only then can they survive long-term.

5. Review and Reflection Are Key to Differentiation

One of the key differences between ordinary retail traders and top experts is review. Developing a habit of reviewing your trades is essential.

Many close their trading software after the market closes, watch shows, play games, or vent, only caring about daily profit or loss, never thinking about why they made or lost money. But every loss is a tuition fee paid to the market; without review, that fee is wasted.

Every trade should be reviewed, especially losses—they are the best teachers. Why did you lose? Was it chasing highs, not setting stops, or emotional trading? If it's a normal system loss, accept it; if it was a mistake, engrain the lesson and vow not to repeat it. Profitable trades should also be reviewed to see if they were due to skill or luck.

Prepare a table to record key information for each trade: reasons for buy/sell, emotional state at the time (fear, greed, impulsiveness, or rationality), final result, and reflections. Write it immediately after closing the trade; otherwise, details will be forgotten in a few days.

Persist in reviewing for a year, and your understanding of the market will undergo a qualitative leap.

Short-term trading is a brutal淘汰赛. If you are determined to walk this path, engrain these five survival wisdoms in your mind. If you've experienced similar pitfalls or resonate with these principles, feel free to share in the comments. (Note: Some content references views from media blogger “Zhuoye Joey”)