Over Confidence

Over ConfidenceLesson 7 of 95 min read

How a streak ends

A run of winners raises your size and your certainty at the same time, which is why the loss that follows does unusual damage.

The dangerous part of a winning run is not the run. It is the trade immediately after it.

The belief that forms

Four or five winners in a row, and something changes quietly. You stop thinking in odds and start thinking the setup works.

Nobody says that sentence out loud. It shows up in what you do next, which is to treat the next trade as a formality.

A streak feels like proof and is only a sequence.

Two things move at once

Certainty rises, and size rises with it. Those two are the same movement, because you only risk more when you doubt less.

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