Tag Archives: common sense

11 Biases That Affect Traders

By | November 28, 2013

Overconfidence As the name suggested, it is the irrational faith in one’s skills, methodology or beliefs. For example, you see a certain chart pattern and make a maximum leveraged trade, even though you understand that any chart pattern cannot predict market with certainty. Trading excessively after a winning streak also shows overconfidence. Cognitive Dissonance It… Read More »

Trading Errors

By | November 1, 2012

Ignoring the downside of a trade. Most traders, when entering a trade, look only at the money they think they will make by taking the trade. They rarely consider that the trade may go against them and that they could lose. The reality is that whenever someone buys a futures contract, someone else is selling that… Read More »