Unit 2 · Level 3 · Handling wins
Euphoria risk
Ask around: most traders' worst blowup came directly AFTER their best month. A winning streak quietly rewrites your self-image: careful becomes confident becomes invincible. Size creeps up, entries get sloppy, and the streak's real cause (often a friendly market regime) goes unexamined. When the regime turns, the trader who was winning biggest is positioned worst. In 2021 plenty of traders tripled their accounts; in 2022 many of the same accounts went to zero.
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What you get asked
Put the overconfidence loop in order
League 1's overconfidence lesson showed we all think we're above average. A winning streak is that bias plus evidence, which makes it far more convincing and far more expensive.
Why do winning streaks so often precede blowups?
The market doesn't punish winners. Winners mispositioned by euphoria punish themselves. Biggest size plus loosest rules is a formula, and streaks build both.
A winning streak during a roaring bull market mostly proves the market was going ___.
Everyone's a genius in a bull market, as the old line goes. Separating your skill from the market's mood is the win review's job (coming in lesson 4).
After five wins in a row, what should happen to your position size, according to this lesson?
The 1% rule from the Trading course doesn't have a 'feeling hot' exception. If size only ever changes through calm, written rules, euphoria has no lever to pull.
Which thought is the euphoria equivalent of "I need it back NOW"?
Tilt has a twin that feels wonderful. Both states remove the plan; only the soundtrack differs. Treat 'I can't lose' with exactly the suspicion you'd give 'I must win it back'. 🐜
The rest of this unit
Winning is dangerous too: euphoria, house money, and the discipline of paying yourself.