5 Trading Biases You Might Not Even Know You Have

Trading biases can totally play mind games with you and mess up your vibes before you even hit that buy or sell button. 🧠

The first step to fixing ‘em? Spotting them IRL. 👀

Here are five of the most basic forex trading biases. Which ones hit home, fam? 💔

1. Recency Bias

You ever catch yourself zoning in on your last trading moves and completely forgetting the big pic? Then ya might just be guilty of recency bias, my dude! 🙃

Recency bias is like a filter over your brain, making you put too much focus on the latest events. 🕶️

And it’s not just about your trades; losing your groove after a couple of Ls happens too. It might even mess with how you peep the markets.

Focusing too much on one economic event without peeping the big fundamental scene, or just eyeing the latest candlesticks and ghosting long-term trends? Yep, that’s recency bias at work.

Take a step back, look at the long-term sitch of your trades or portfolio. Keep the big pic in your sights, and don’t let your last W or L sway your trading game. 🚀

2. Confirmation Bias

Being human means we vibe with stuff that matches our thoughts and ghost the haters, am I right or am I right?! 🤔

The prob? It makes our trading calls subjective AF. Ignoring bearish vibes while you’re hyped on bullish analysis? Classic confirmation bias! 🤦

Stay lit by being open to other peeps’ takes. Another perspective might catch something you missed. Balance the scales by bouncing your ideas off different analysts.

3. Herding Bias

If you’ve ever noped out of a trade ‘cause the crew’s taking the opposite route, then herding bias got you. 🙈

Like sheep flocking together, traders tend to stick with the squad too, feeling all sorts of things about standing solo. It’s human nature, ya know?

WRONG!

As a trader, don’t sweat going against the grain. Do your research, ace that technical/fundamental analysis, and plan like a boss.

If you've got solid reasons to believe the market’s flipping, don’t just ride the wave ‘cause everyone else is. Even if yo momma and her momma said so. 🌊

Need extra confirmation to break away from the crowd? Our lesson on gauging market sentiment could be your BFF.

4. Attribution Bias

Attribution bias is when you twist the who’s-to-blame game. Like, what even, right? 😅

In trading, it's when you flex your skillz for wins and blame losses on stuff you can’t control, like unreliable markets or potato-level WiFi. 📶

My fav trading shrink, Dr. Brett Steenbarger, says that bias is a decision-making killer.

If you can’t take the wheel of your trades because everything seems out of reach, what’s the 411 on crediting yourself where it’s due? You’ve gotta scope out those bad trade habits.

This is where keeping a lit trade journal comes into play. Note what was hot, what was not, surprises, and coulda-done-betters.

According to Dr. Steenbarger, this will help you own your strengths, face your weaknesses, and be woke about your trading strategies.

5. Addiction Bias

Traders have crystal-clear memory of their “hall of fame trades”, just like fighters reliving their glory days. 🏆

It’s not enough to just remember those big wins; the numbers gotta back it up. You’re aiming for trades that sit on solid probability.

If any of these biases felt a bit too real, good. It means you’re awake. Trading’s mental and technical, fam. Yeet those bad habits and you’ll level up faster than a speedrun. 🎮

You’ve got all the tools and resources you need, so no excuses to let those bad habits haunt you! 🚫🔁