For everyone… especially traders.
Read time: About 4 minutes
Our Beliefs…
We all have Confirmation Bias at times. When we have certain beliefs, we tend to act as if we’re right in those beliefs. We might be right…or not. Politics and religion are two of the biggies. We can develop strong opinions based on experience or previous parenting or friends, etc… We also tend to read content and watch media that supports our beliefs. We discuss these opinions and socialize with people that are like-minded. We are drawn to things that confirm our beliefs. There is a great definition of Confirmation Bias on Wikipedia https://en.wikipedia.org/wiki/Confirmation_bias
Can it Affect Our Trading?
Here’s the picture… you’re hanging with friends. One of your buddies starts talking about this new crypto currency that they have bought. They heard about it from a successful person that had invested a chunk of their own money. The whole group gets interested. Emails and texts start flying about. You find yourself reading the company website and articles about it. The price of the crypto goes up strong. You buy some. Now you are telling your other friends and convincing them of the same story. You buy some more. One of the friends sends you an article saying that it’s a scam. You argue with them. You can’t possibly be wrong. A bunch of people believe the same thing. The price goes back down. You can’t sell it because you believe in it and you have convinced others to buy it. You bet it can affect our trading.
Acknowledge our Bias
The brain is a survival tool. It wants to protect us. It doesn’t want us to be wrong. We find a stock that checks all of the boxes. We have our exit price if we’re wrong. We have it all written down in our trading checklist. We buy some. It starts going down immediately. It hits our exit price. We… convince ourselves that that exit price is a little too restrictive and we’ll draw a different line or find another reason to let it slide a little more. Acknowledge this bias. It happens to all of us. Get back on track. Follow your system. Sell that sucker!
Why Have a System?
Trading and Investing is for our future. We do it to help our families and our charities. It’s serious. It’s a business. It’s a big deal. How else can you start a small business with unlimited potential without much capital and keep your costs low? The brain needs a system and practicing the right things can create the discipline to become a great trader. Practice being wrong in the trade and correct in selling with a small loss. Learning to lose well is one of the toughest parts to trading. Have a system that works and follow that system. SquiggleTrader does that. Other systems work too. Find one that works for you and use it.
We would love to have you join us. Click “Sign Up” on the front page and choose either the Free Interested Member or the All-Access Member for $9.95/mo. Free Members will get one to two video training updates per week. All-Access Members get all access and that will consist of 5 to 6 video trainings a week plus full training on how to get started.
Feel free to ask questions. Please tell some of your friends about us. Thanks for reading.
Cheers!
Bo – Chief Squiggler
Help Yourself. Help Others.
Disclaimer
This communication is not a recommendation to buy or sell any security. It is not to be considered financial or investment advice. This is an educational and training tool only. If a specific security is mentioned, it is for illustrative and hypothetical purposes. You must use your own knowledge to determine what to trade, how much to trade and when to buy or sell. Investing and Trading involves risk and you can and will lose money. Past performance is no indication of future results. You should practice with fake/virtual money (paper trading) before risking real money. All communications and videos are for members only and are not to be shared. Consider all content copyrighted.