trading stocks in 2026 is like storming normady beach

Summary

Thread Guy explores trader psychology using the Iowa Gambling Task and 'The Hour Between Dog and Wolf' to explain how physiological changes from consecutive wins fuel irrational exuberance and market bubbles.

• The Iowa Gambling Task shows how subconscious physiological signals (e.g., sweating, heart rate) predict risk before conscious recognition.
• The book 'The Hour Between Dog and Wolf' examines how traders' bodies undergo a fight-or-flight transformation when entering trades, altering brain chemistry.
• Winning streaks boost testosterone, risk tolerance, and confidence, leading to euphoric overconfidence and larger risk-taking.
• Market bubbles form when many traders simultaneously experience this euphoria, driving prices to irrational extremes.
• Historical parallels include the dot-com bubble, NFTs in 2021, and AI coins in 2024, where hindsight reveals delusional behavior.
• The 'masters of the universe' mentality is cited as a hallmark of bubble participants who overestimate their pattern recognition.