Even if you're not a day trader, you've no doubt heard meme shares. They are viral animals that take on a life of their own. They act similar to a geyser, where pressure builds until an event – or social media post – sends a segment of investors into a frenzy and drives stocks to unreal levels.

After a while, the show is over and those reserves effectively disappear until the pressure builds again. As I write this, we are in another active phase of meme shares.

have been day trading since before meme shares were a thing, and I have the scars to prove it. In my book and in the courses I teach, I explain that meme shares are a very efficient way to lose your life savings if you approach it the wrong way.

What is the “wrong way?” It's one thing to be notified by social media about the next active meme geyser; what you don't want to do is get your trading instructions from social media. The most scattered comments also tend to be the most extreme, designed to be uplifting FOMO.

Therefore, I want to share with you five meme-mania observations based on the fact that I have placed more than 20,000 trades in my career.

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1. You can't predict the market, but you can predict human nature pretty well

Humans have survived thousands of generations in harsh environments by being social animals. Coming together and taking joint action against common challenges worked well. The difference now is that the signals to take action don't come from people in your local area with shared needs, but from “influencers” with their own motivations, which often don't match yours.

Often, the loudest voices among investors are those who took their positions in a stock some time ago. Their motivation now is to pump the stock to new levels so they can exit their positions. I will talk more briefly about what you can do in this situation.

2. There is no such thing as financial markets or society “learning its lesson”. Only individuals can do this.

World War I was supposed to be the “war to end all wars.” It's estimated that the first GameStop heater cost Wall Street $20 billion, and now traders are at it again. All this is explained by the “Principle of the Moving Parade”. Let's say you play clarinet in your local marching band and your route takes you three miles across town.

By mile two, you'll be completely sick of playing the same song for the 15th time – but for the people standing at mile two, it'll be the first time they've heard it. Many investors have not experienced a meme stock, and the possibilities are intoxicating.

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3. Most individuals do not learn from an exposure

That includes me, I'm sorry to say. In my first two years of trading, I already knew a lot of the rules; for example:

• Place a maximum loss for trade and sell if you reach that number.
• Set a daily maximum loss amount and quit if you reach that number.
• Don't add to losing trades by “averaging out,” thinking you're being smart by lowering your cost averaging basis.
• And DON'T “revenge trade”, where you hope to make up for previous bad trades by quickly jumping into another one.

I knew all these rules I set for myself, yet I broke them and a few more.

There is an old story about a man who went to a farmer who was sitting on his porch. The farmer's dog also sat there, howling in pain. “What's the matter with your dog, sir?” “He's sitting on a nail.” The man said, “Why doesn't it fall off the nail?” The farmer said, “Because it still doesn't hurt enough.” It wasn't until my pain became great enough that I stopped breaking those rules and started building my account balance.

4. When the opportunity seems great, the need for discipline at that moment is even greater

You must practice discipline when your emotions are strongest: “Don't miss it! This next trade could pay for that new car! Fortune favors the bold!” Day trading the right way means flying by trusting your instruments, not your gut.

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5. Your goal should be to get on base – not hit a home run

I've had a few six-figure profits from trading in a single day, but I never woke up knowing I was going to have a day like that. I intended to stay alert and disciplined and follow my own commercial plan. Sometimes, following my plan, it becomes clear that a day is unfolding with great volume and my first trades were strong winners. OK, I got on base, and today, I feel like I'm in a hole. Mickey Mantle said that on such days, he saw the baseball as “as big as a grapefruit.”

I want to make the most of this trading day, but I won't do it by throwing caution to the wind. I let my winners ride, but in order smaller positions. When I reach a target profit level, I will sell part of my position and let the rest run. I might end up doing this a few times. In hindsight, this always means I could have won more money if I hadn't taken any off the table. But that also means I can never hide because I'm locked into profit slices.

Meme geysers definitely add great energy to the commercial environment. They are worth attending, but only on your terms. When your trading discipline matches market opportunity, you will have a trading day that is memorable for all the right reasons.