My swing trading equity P&L line looks EXACTLY like every stock chart, and it has ALL the stages that you will go through as a trader; consolidation, rip higher, rug pull, grind higher. If you go through 1,000 charts, you will notice the exact same pattern; if you go through the returns of 1,000 mutual funds or hedge funds, you will see the same pattern repeat itself over and over again.
Once you start seeing the pattern for yourself and you start to accept the fact that these stages are unavoidable, you will stop falling for the trap of always getting excited about an investment after it already has made a move. You will start drooling over it during downturns and consolidation periods.
“The psychology of the investing public changes–cycling from the most blissed-out euphoria about equities to the most abject terror and then back again, always at the wrong times.”
You will NEVER be able to avoid these stages; your goal is to have them repeat themselves at higher levels each time.
This is your plan versus Reality.
The market got ahead of itself this week.
And of course, you can’t trade or invest in the market without your fair share of losers. There are way too many people who try to avoid the unavoidable, which is taking losses, don’t waste your time doing that, accept that losing is part of the game.