a little thread on trading psychology for new ones, and what will go through your mind over the next 6-12 months as this market goes even more ballistic:

1) right now, you're probably fairly calm, but definitely excited by how much money you're making. you wish you ... 1/

... invested more last year (i know i do). you're moving in a calculated way, maybe aping a bit, but not getting crazy. (good, this is where you need to stay at, mentally, as you'll see)

2. as those 4-10% daily portfolio gains start to turn to 15-20% days, your FOMO will ... 2/

... start to kick into overdrive. that money could be so much more if you just had more in the market! you start to raid your savings accounts (i did this a few months ago, because may as well go all in early!). the money is great

3. as the market goes truly parabolic... 3/

... the FOMO will drive you literally insane. here's where retirement accounts get raided, people start selling stuff, savings accounts drained. ALL IN (the market is also way closer to top than bottom). the trades get riskier, the risk mgmnt non-existent. 4/

4. once you're all in, completely, and levered to the tits, the market slows. big dumps, but they get bought back to parity. "Just a little bit more and im out!" you say to yourself.

5. that was the top. you're still up bigly, but you will be physically unable to sell... 5/

... because greed has completely taken over. everyone on twitter is screaming BTFD &posting huge uPNLs. you know you should sell (you won't)

6. now the big dumps are being bought back violently, but can't get back to the highs. this keeps you in. you're down from your ATH...6/

... but still up bigly. you will start selling, but not dumps, not rips, and buying back rips because number go up!

7. "Ok, now we're dumping like we mean it, WHAT THE FUCK!" you're down 40% from your ATH (also, taxes... wew lad)

8. "these dumps are killing me. I'm out" ... 7/

... ok, you made it out alive. up 2-3x still over initial investment. this is good, this is fine. wait? i gotta pay taxes on last year's gains, even though i lost most of it?

Congrats! you are now a guy who owes $80k in taxes, on $40k in realized gains!

i say this because...8/

if you know now what to expect, you will be better able to combat this. i am also reminding myself.

point being, get ur mind right now, because once u lose ur discipline, u won't get it back

markets are designed to exploit this simple fact

gl, hf (and better luck next time)

also if u do somehow make it out alive, you now have this miserable existence to look forward to lol https://twitter.com/chad_alt/status/1230816816752189440?s=19