When making too smoothly becomes the beginning of a loss, do you also fall into the “Euphoria” trap

In the field of trading, there is a psychological trap that is not easy to detect but extremely destructive.
“Euphoria”. It often occurs when you make continuous profits and your state soars – when trading becomes easy and smooth, your confidence expands all the way, and the risks are approaching quietly.

In the past, EagleTrader has shared many trading psychological problems surrounding negative emotions such as “fear” and “worry”. But the danger of the “Euphoria” trap is that it originates from a positive emotion – ecstasy, an overconfidence brought by profit, and behind this is our obsession with “perfect transactions”.

This article will take you to deeply analyze this psychological trap caused by “making too smooth” and see how it quietly distorts traders’ judgments and even becomes the beginning of losses.

The formation of the illusion of “perfect trading”

Almost every trader will draw a vision when he first entered the industry: high winning rate, precise points, and extremely high profit-loss ratio operations – one entry, clean and neat, and no turning back on the floating profit. It seems ideal, but in fact it is a psychological template: “I can control the market, as long as I am smart enough.” This template is easily strengthened by a successful one, such as if you buy accurately and increase your position smoothly, and double your profit. The brain immediately remembered that “protagonist halo” excitement and tried to copy it. The problem is – the market is nonlinear, but human memory and emotions are linear.

So you will start pursuing “do it again”, not allowing yourself to make mistakes, not accept normal fluctuations, and not tolerate losses. This is the beginning of the perfect trading illusion.

Then you fall into the “Euphoria” trap

The “Euphoria” does not appear in a dangerous posture, it often wears the disguise of “I am in the right state.” When you make continuous profits and your account equity continues to hit highs, you will start:

Gradually enlarge your position: “This order is so accurate, it doesn’t matter if you shuttle at all.”

Short down the operating rhythm: “Don’t wait for the signal, the trend is already obvious.”

Ignore risk control: “I won’t make low-level mistakes, don’t set the stop loss first.”

At this time, you are no longer a calm and rational trader, but more like a player in gambling.

Once the market reversal occurs, inertial thinking makes you deny your mistakes, refuse to stop loss, and increase your position in your emotions. The result is that you lose control at once, swallowing up all profits in the early stage.Even the stock price is broken.

What’s even more terrifying is that you will even make a “rationalization” explanation of this failure:

“It’s just that I’m not lucky this time, I will definitely do it next time.”

So, the “Euphoria” trap began to cycle.

Allow imperfection, return to the system

If you want to get rid of this cycle, you must first break the fantasy of “perfect transaction”. The core of accepting transactions is uncertainty management, rather than accurate prediction. This requires you to start from the following three aspects:

Set the boundary: Profit and loss are only part of the system, don’t be emotional about winning and losing a order, the focus is on whether the long-term backtest is stable.

Regular self-inspection: Are you impulsive after making a profit? Have you changed the risk control? After winning continuously, you should be more cautious and write your calmness into your review template.

Establish “external discipline” to replace emotional judgment; replace feelings with rules and replace fantasy with systems.

Trading psychology needs practical training

On the EagleTrader platform, we have observed that many traders are in excellent condition at the beginning, but later they are out due to emotional expansion. This is not a technical problem, but a trading psychology problem.

The original intention of our establishment of the self-operated trading exam is to provide a real trading environment + simulated fund account, allowing traders to temper discipline, control emotions, and establish systems in a safe space.

Through the phased assessment, traders can not only obtain profit sharing incentives, but also constantly expose and correct psychological loopholes.

If you are troubled by how to get out of the emotional trap, perhaps adding a rule “shell” to your transaction is a good choice.

Because trading is never about who can win, but about who can keep winning steadily.