Hey traders,
Here’s what happens when you think you found the bottom… but the stock has other plans.
You buy the bounce, feel smart for five minutes, then watch the price grind lower and trap you in quicksand. Suddenly, your “perfect entry” looks like a slow bleed.
This happens because nobody has told you the truth: the first bounce rarely sticks.
The market loves dangling a fake bottom in front of eager traders. It’s bait. And most people take it.
The ones who survive know the pattern. They wait. They let the first bounce fail, watch the weak hands blow up, and then they strike when the second (or third) setup offers real probability.
But that’s just one of the rules nobody teaches you.
There are a couple more that protect accounts better than any fancy indicator.
Break them, and you bleed.
Follow them, and suddenly trading feels less like chaos and more like controlled risk.
I wrote them down for you because, honestly, most traders will never hear about them until it’s too late.
The 3 Rules They Don’t Tell You Until You’ve Lost Enough
Most traders blow up because they never hear the truth. They’re fed flashy setups, screenshots of monster wins, and shallow “buy low, sell high” slogans. Meanwhile, the stuff that actually protects capital stays hidden.
I’ll give it to you straight. Follow these rules and you’ll survive long enough to grow. Ignore them, and the market will take your account faster than you think.
Rule #1: The first bounce lies
That first bounce after a panic drop feels like free money. Charts light up, volume spikes, chatrooms buzz. Everyone calls “the bottom.”
But here’s the secret: that bounce exists to trap you.
The market knows traders can’t resist. You buy into the bounce, the stock hesitates, then rolls right back over. By the time you cut, the damage hurts.
The smart play is to just wait. The second or third setup gives a higher chance of holding because the emotional money already burned out. Think of the first bounce as bait. Don’t bite.
Rule #2: Liquidity decides everything
No one tells you this upfront because it’s not sexy. But liquidity decides whether you walk away clean or get stuck holding the bag.
Thin stocks with low volume look like easy wins. The spread looks small enough. But when you try to exit, it turns into a trap. Slippage, delayed fills, and someone else controlling the tape, now you’re the liquidity for bigger players.
Treat liquidity like the fire escape in a crowded building. If it’s narrow and jammed, you won’t get out when the alarm rings. Only trade setups where the volume gives you a real exit door.
Rule #3: Small size keeps you alive
This one almost no one wants to hear. Everyone chases size because they think it proves skill. In reality, size just speeds up your losses when you don’t have consistency.
If your edge works, it will show up in small trades. If your edge doesn’t work, bigger size only exposes that weakness faster.
Smart traders treat small size as tuition. They use it to test, refine, and survive. Once consistency comes, scaling feels natural, not forced.
Why these rules matter
Forget the hype, the fancy scanners, the “can’t-miss” indicators. This game boils down to survival. These rules aren’t glamorous, but they keep you in the game.
- Avoid the bait of the first bounce.
- Refuse illiquid traps.
- Protect yourself with small size until you prove your edge.
Most traders learn these only after their account gets wrecked. Better to know them before the market teaches you the hard way.
You can step around the traps instead of walking right into them.
The market rewards patience, discipline, and survival. Everything else is noise.
Be patient for your shot,
Jack Kellogg