Overcoming Common Biases in Stock Trading
Overcoming Common Biases in Stock Trading. Stock trading is not just about evaluating charts and financial data; it also includes dealing with your own psychological biases. Human psychology may frequently drive traders to make illogical judgments, resulting in huge losses. Recognizing and overcoming these typical biases is key for effective stock trading. In this post, we'll cover some of the most prominent biases in stock trading and how to overcome them. Overcoming Common Biases in Stock Trading Confirmation Bias **Bias:** Confirmation bias is the propensity to seek and interpret information in a way that supports one's prior opinions. In stock trading, this can lead to traders selectively focusing on information that supports their present position while disregarding contradicting data. **Overcoming It:** To combat confirmation bias, traders should actively seek out multiple sources of information and be open to other opinions. Create a trading plan with preset entry and ex