EUPHORIA
Oldie but a goodie. Enjoy.
Trading has taught me many things.
I’m more patient and calculated. I’ve also become pretty emotionless when it comes to making money. I’d be lying if I told you otherwise.
Something that struck me during the last bull run was the drastic, 180-degree tone shift that took place on social media. Sure, people still had their occasional grievance here and there, but for the most part, it seemed as if most of the petty tensions were mysteriously lifted. Inspiration skyrocketed to all time highs and hopium became our daily communion.
Then… well, the same euphoria we clung to so dearly, turned around and killed the market in cold blood, without a second thought.
Euphoria Kills.
Euphoria is not your friend.
It’s a wolf in sheep’s clothing. We’ve seen it many times.
In reality, you should become wary when you notice that the market is becoming less rational, more delusional and devoid of skepticism.
If it ever seems like the entire space has been hypnotized, stay alert. This is the power of euphoria. It thrives off dopamine and grows stronger with greed.
People ride the temporary highs euphoria strategically injects into the market, too drunk on emotion to notice the truth.
There are two types of people in bull markets —
the clueless, and the emotionless.
Unfortunately for the clueless, they will get taken advantage of. You will lose all of your money if you don’t pay close attention in these times — and you may not have the mental resilience it takes to recover.
The emotionless don’t have it all figured out either: they are sometimes too paralyzed by their own skepticism. Fear from past markets have rendered them useless and, well, they may have lost the ability to take risks.
Euphoria is one hell of a drug. So, let’s get clean.
When To Say When.
Know when to hold ’em. Know when to fold ’em. Know when to walk away. — Kenny Rogers.
If you want to become a good trader, you need to know when to take good risks. Every risk must be calculated. You need to know when to lower that risk and most importantly: when to take some chips off the table.
That’s it.
So, why do so many people fail? The answer is simple: We tend to become attached to our bags, because our bag is usually attached to a cult of some form.
Read this carefully: Falling in love with your assets is a zero-sum game.
When you become emotionally involved, logic and reason exit the building. You can not properly trade without them. More often than not, emotional traders find themselves in holes they can no longer climb out from.
So what’s the fix?
Be Like Water
Like water, you must become formless.
Water can take any form, become any emotion and adapt to any surrounding. Water can be as soothing as the tea you drink in the morning, or as ravenous as the hurricanes that engulf whole cities.
In terms of trading, this involves.
Calculated Risk (based on your conviction, trends or technical analysis).
Profit Taking
Adapting to Markets
Goal-setting
Emotional Detachment (From your JPEGs, micro-caps, etc.)
On emotional detachment: I’m not asking you to be a psychopath. I’m asking you to consider the fact that 99% of this shit won’t be here next year. That’s all.
This mantra has saved my portfolio and leveled my mindset too many times to count. I was able to adapt from micro-cap trading (where my expertise lies) to flipping NFTs.
My micro-cap friends told me I would lose all of my money if I made the switch. If I had listened to them, I would probably be very bored right now. I would probably still be broke and I definitely wouldn’t be writing this article.
Don’t be scared of change; embrace it.
Closing Thoughts.
This article is short, but important. I encourage you to question everything and remain cautious in bullish markets.
This is a great time to set some goals for yourself.
Remember: If you aim at nothing, you will miss 100% of the time.
Invest responsibly. — Lite.