When you're riding high, the market is just waiting for you to slip up.
Have you noticed that when you take a big hit, it usually doesn't start out that way? You often make a profit first. After raking in some gains, you get recklessโdoubling down on your positions, canceling stop losses, chasing pumps and dumps. Then comes a correction, profits vanish, and you end up losing your principal.
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It's not the market targeting you; it's you who opened the door. Making money makes you let your guard down, and that leads to mistakes, which brings you back to square one.
I set a hard rule for myself: if I make a certain percentage profit in a day, or hit three winning trades in a row, I must go flat the next day. No staring at the charts, no analysis, no discussions about market trends. Just do something elseโplay games, go for a run, cook, anything. The goal is to cool down that overexcited brain.
$ๅธๅฎไบบ็ This rule has saved me countless times. There have been several occasions when I went flat, and the market indeed continued to rise. I felt a bit regretful watching it. But the next day, when I looked back calmly, I saw that those who chased after the rise ended up getting trapped. And because I stayed put, I avoided a disaster.
Stop always thinking about chasing the win. Sometimes, pausing is the best strategy. Decisions made when you're riding high are nine times out of ten wrong. First, let yourself cool off, then decide on your next trade. Once you learn to "make money and go flat," that's when you truly enter the game. $LAB