I'll try to say this simply (prior draft was too wordy):
-Markets are cyclical
-Your edge will fluctuate
-Learn when your conditions are hot/cold
-Know that there is a tapering effect
-Participants run out of hard (cash) AND mental capital 🧠
1/
-Markets are cyclical
-Your edge will fluctuate
-Learn when your conditions are hot/cold
-Know that there is a tapering effect
-Participants run out of hard (cash) AND mental capital 🧠
1/
Think about all the times you get overconfident and then things hit the fan, almost as if the world is conspiring against you.
"How dare you size up!
Prompting, "Why me? Why now?"
But let's put it into the perspective of stages in a cycle... Beginning, middle and end.
2/
"How dare you size up!
Prompting, "Why me? Why now?"
But let's put it into the perspective of stages in a cycle... Beginning, middle and end.
2/
If your edge is playing out beautifully we're happy to push, we're happy to size and by all means, do.
But when we reach a precipice it should be clear to you and others.
Be prepared for the eventually shift out of favor... a slowdown.
3/
But when we reach a precipice it should be clear to you and others.
Be prepared for the eventually shift out of favor... a slowdown.
3/
Crucially I think paying yourself makes the MOST sense at this point.
Beyond the obvious, it resets your accnt whereby you're now able to get feedback & act defensively, should you need to.
Having "cushion" with profits leads to overconfidence... Thus risk of losing it.
4/
Beyond the obvious, it resets your accnt whereby you're now able to get feedback & act defensively, should you need to.
Having "cushion" with profits leads to overconfidence... Thus risk of losing it.
4/
By resetting the account you're able to be more naturally keen and aware of shifts.
You'll realize... "Ok, if I size up here, it's clearly a mistake"
Why? Because the market is starting to give more resistance towards your edge.
5/
You'll realize... "Ok, if I size up here, it's clearly a mistake"
Why? Because the market is starting to give more resistance towards your edge.
5/
Inversely, it'll prompt you, if you've been paying attention, to size down in the face of this scenario.
This accomplishes a few things:
-protecting prior gains
-stabilizing risk profile... not getting aggressive during a decline of edge
-mental clarity, avoiding frustration
6/
This accomplishes a few things:
-protecting prior gains
-stabilizing risk profile... not getting aggressive during a decline of edge
-mental clarity, avoiding frustration
6/
That all being said, easier said than done.
We're all humans and ultimately all suck in a lot of ways.
Greed and fear will perpetually dominate our psyche if not safeguarded against.
Ideally we could do it all with mental fortitude but I just don't see it.
End.
We're all humans and ultimately all suck in a lot of ways.
Greed and fear will perpetually dominate our psyche if not safeguarded against.
Ideally we could do it all with mental fortitude but I just don't see it.
End.
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