12 Proven Trading Principles to Boost Your Success

Marios Stamatoudis
Marios Stamatoudis

Marios Stamatoudis is a swing trader and top performer in the 2023 US Investing Championship, with a 291% return. He focuses on momentum and high-growth opportunities.

January 25, 2025
5 min read
1580 views

If There Is a Holy Grail in Trading, This Is It :

Price and Volume are the only expressions of all the actions in the markets. There is no other way for everything that happens in the markets to be expressed. Price and Volume are the sole expressions of the whole. All information is contained within price and volume action. The more you dive into them, the more in tune you become with the collective of the market.

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Reverse Engineer the Minds of Successful Traders

When learning from people you admire, don’t just copy their methods and strategies; try to reverse engineer their minds. That’s how you gain deeper insights. Trading success comes from being a mechanical engineer of a trading foundation, not just an operator of borrowed ideas.

Technical Analysis: It’s Not About Prediction

Technical analysis is not meant to be used as a tool of prediction. When looking at technical structures, you shouldn’t wonder if you have a better chance of winning than losing.

When you look at a technical structure, you should think:

  • Is this setup dynamic?
  • Can this setup give me far more than I risk?
  • Can this setup quickly tell me if I am right or wrong?
  • Has this setup appeared in past top performers in the stock market?

Asymmetry Is the Real Superpower, Not Prediction

Prediction is not a superpower in trading. Asymmetry is the only path to success. You need to structure your foundation so that you can earn much more than you risk. But merely hunting for asymmetry isn’t enough, as it can come by luck or rarely—you must place yourself in areas where asymmetry is likely to emerge frequently.

Embrace Doing Nothing—or Simply Do Less

Sometimes, the best thing to do is nothing at all—or simply less. You can’t make money every day, and it’s difficult to make money every month.

Fully embracing the idea that minimal drawdowns, even over extended periods, are completely normal and don’t prevent you from achieving your goals will strengthen your mindset in the long run.

Test and Validate All Advice

Be willing to take advice from people with more experience than you. But don’t use this advice right away. Challenge it, stretch it, verify it, or change it, and solidify it through experience. This is how you make it yours.

Study Market History to Recognize Patterns

Studying stock market history and stocks that made significant moves in the past is the only way to recognize underlying behavioral, technical, and fundamental patterns and become attuned to the market collective.

The true edge in trading doesn’t come from hidden information; it lies in information visible to everyone but understood by only a few. Seek out these underlying commonalities, and you will gain the edge you desire.

Build Confidence by Understanding the Whys

Confidence is built by answering the “whys” and eliminating doubts in your trading system. This is the only way to avoid style drift and set your trading rules.

Know Your Trading System Inside and Out

Understanding what is normal to happen often and what is not in your trading system is the only way to follow your rules. Few people truly understand the capacity and nature of the system they use.

Those who do have a much smoother journey because they are not often surprised. The ratio of surprises is the biggest factor in making big mistakes that can harm your process.

Emotions Aren’t the Biggest Problem

Emotions aren’t as big of a deal as you might think. No one is emotionally unbreakable. Emotions are natural and can’t be avoided—we are human.

Problems in trading don’t arise from emotions themselves, but from large psychological swings caused by frequent surprises. The more you know your system, the more you learn what to anticipate. This reduces the surprises that cause psychological swings and lead to many trading struggles.

Avoid Big Mistakes and Small Losses Will Take Care of Themselves

In society, you are rewarded for being consistently right. In the markets, you are rewarded for consistently avoiding big mistakes. You can be right only 20% of the time and still make more money than you ever imagined.

Structure Your System for Harsh Conditions

Structure your system to withstand immense pain and harsh conditions. Focus more on reward-to-risk ratios than on win rate, and use smaller risk per trade. Trading becomes easier when you can still make money, even if you’re wrong many times, or lose minimally when conditions aren’t ideal.

Keep It Simple for Sustainable Success

Don’t overcomplicate things—it’s not necessary to make money. Every trading foundation, regardless of time horizon, has both complex and simple formats. You should always aim to use the simplest format your system can take while still achieving your goals.

Complexity adds pressure, while simplicity enables consistent operation under the right mindset.

Frequently asked questions

Price and volume reflect every action in the market. They capture all buying and selling decisions, making them the most direct and reliable sources of market insight. The deeper you analyze them, the more you align with market trends.

Technical analysis helps you identify high-probability setups, not predict outcomes. The key is finding setups that offer a strong reward-to-risk ratio, quick feedback on trade validity, and a history of success in past market leaders.

Asymmetry ensures your winning trades earn far more than your losses. Instead of trying to predict every move, focus on placing trades where the potential upside is significantly larger than the downside. This approach builds long-term profitability.

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