Napoleon. I’ve never really posted about this, but today feels like the right day to put it out there because I’ve been on a fucking streak, and I think many of you reading this have been too.... Over time, I’ve learned that whenever I get into one of these streaks, I need to be the one who ends it voluntarily instead of waiting for the market to do it for me. The problem with a hot streak is that it compounds two things at the same time: your capital and your confidence.....every good trade increases both. You make more money, so you trust yourself a little more; because you trust yourself more, you are willing to size up; if that trade works too, the loop reinforces itself. Which feels perfectly rational because the P&L is validating you, even though that P&L cannot tell you exactly why.... Any streak is some combination of three things: skill, being unusually well positioned for the market regime you happen to be in, and luck. After enough wins, though, everything starts getting attributed to skill, and eventually you stop understanding that you had been making good, calculated trades and start thinking that you are simply very fucking good at trading. Man, the things I have said to myself during past streaks would make Napoleon humble.... I used to love that feeling, now it makes me very damn uncomfortable.... And because I have had a few streaks end terribly, I learned to think of them as a staircase built into the side of a cliff, where every winning trade carries you onto another solid step and makes the next one feel increasingly inevitable. As you climb higher in both capital and confidence, the staircase behind you begins to look like proof that the staircase must continue ahead, even though you can never see the next step until you put your foot out and commit your weight to it. Sometimes another slab of stone is waiting to hold you, but sometimes the staircase simply ends, leaving your foot suspended over empty air and the drop below. What fucks most people up is that the staircase itself makes the cliff harder to conceptualize. The higher you climb, the more evidence you have that another step must exist, because every step behind you did. The trickery is biological btw, sustained winning periods coincide with elevated testosterone.....If you have experienced these streaks, you can feel how you become more decisive, more willing to trust your instincts, more comfortable taking risks. A power of its own, until it’s not.... Which is why whenever I feel myself getting too high up the staircase, I now take my cocky-ass self down the stairs by my humble self.... That by no means means liquidating everything or suddenly turning bearish, I am still keeping meaningful positions in the things I believe in. This is just me recognizing that this hot streak ignited because I stayed active through the bear and kept looking at things when there was very little immediate reward for doing so. Which meant buying the bottoms of the things I liked throughout the bear and, later, being probably one of the first few hundred people playing around on RH Chain. This position can’t be replicated, so those wins need to be cashed, because the trader who made those decisions is not quite the same trader making decisions today. The first one was operating after a bear market, with less capital, less validation, and a healthier amount of uncertainty. The second one has just watched a bunch of his ideas work, has considerably more money available to him, and has accumulated enough evidence to start believing his own bullshit. So what do I do? I take decent profit and move most of those profits back into fiat.....I am taking some of the output from one successful streak and making it unavailable to the next one, which in turn forces my speculative bankroll to reset. If I leave every dollar inside the same pool of capital, then every successful trade permanently increases the amount my future self is capable of risking. Eventually, I know how that story ends.....I keep climbing until I discover that the next step was a cliff. By taking money out, I force myself closer to the bottom of the staircase again, and if I want to get back up there, I have to earn my way back up. Of course, this can be inefficient during a bull market, there will inevitably be things I trim that keep ripping, and there will be moments when pressing harder would have made me considerably more money. I am fine with that. Because after enough streaks, I have learned that the moment I feel like the baddest mf in town is when I am the most vulnerable.... SIT DOWN, BE HUMBLE

I’ve said this before and will say it again (I’ve seen many good soldiers killed by it): Leverage should be understood as an accelerator of time rather than a multiplier of risk. I am almost certain the person cranking it to 10x isn’t sitting there thinking, “I would like ten times the variance.” Nah, he is thinking: I have 100K and I just cannot tolerate how fucking long the unlevered path to 1M takes. The algo has completely fried our sense of how long that path is supposed to take. It disproportionately feeds you the 20-year-old who supposedly made $30M or the token that hit 100x overnight, and now with social trading you get to watch all of it happen live. So you end up recalibrating your clock against outliers. Add to that the fact that we are now being called uncs and plumbers at 30, and suddenly making it at 35 feels mediocre. It’s all a lie.....DO NOT believe it.....It’s an artificial deadline for success created by capitalist propaganda. If you are thinking or using leverage, understand what the actual fuck you are getting into. The more leverage you use, the less room there is for anything to go wrong. At zero leverage, being “right eventually” can still make you money, but as you crank it up, “eventually” starts disappearing. Being right on direction is no longer enough if the move happens too late or price takes the wrong path before getting there. And it gets worse once you understand ergodicity.....If you are a leverage junkie, you probably haven’t heard the word, so let me introduce you to it: Your outcome is determined by the sequence you live through, not by the average across hypothetical outcomes, and if one event in that sequence wipes you out, everything that could have happened after it becomes irrelevant. So when you say, “I only have a 10% chance of liquidation,” you are usually thinking about that trade in isolation. But you are going to trade again and again.....keep introducing a small probability of terminal failure into a long enough sequence and eventually that probability has a very good chance of finding you. Which is why the obsession with being early in life becomes so destructive. It makes you waste the one thing you have in abundance: future attempts. Do not collateralize them through leverage because you think you are running out of time. Get rid of that moronic idea.....You are not old at 30, 50 or 60.