By Sofia Harchich | Trading Psychologist & Behavioral Finance Writer | thewealthmirror.com Confirmation bias in technical analysis is unusual among the biases, in that the standard remedy for it is not merely ineffective. Under a live position it can make the problem worse. The remedy is familiar enough to recite. Seek disconfirming evidence. Argue the…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com The sunk cost fallacy in trading is the most frequently cited explanation for a position held too long, and it explains rather less of that behaviour than its popularity suggests. The definition is sound. The sunk cost fallacy is the tendency to continue…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer| thewealthmirror.com Overtrading psychology is usually discussed as though overtrading were one condition with one cause, which is why the advice about it works for roughly a fifth of the people who follow it. Three traders take forty entries in a week where their plan called…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Pre-trade routine trading psychology suffers from a specific problem: the routines being published are all the same routine, and they are aimed at four different traders. Breathe, review the plan, check the levels, set an intention, note your state. Five to seven steps,…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Money mindset finance psychology rests on a claim that sounds obviously true and turns out, under examination, to be the weakest link in the whole field. The claim is that behaviour follows belief. Change what you believe about money — from scarcity to…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Lists of the best trading psychology books are almost always assembled the same way, and the assembly method is the problem. The titles are ordered by popularity, each gets two approving sentences, and no book is ever found wanting. A list on which…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com The question what is trading psychology usually arrives from one specific moment, and it is rarely the loss itself. It is the moment afterwards, when you can explain exactly what you just did. You know it was revenge. You know the size was…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Why intelligent investors lose money is a question best answered from paperwork rather than from theory. Why intelligent investors lose money is answerable this way because analytical investors leave a trail. Notes, spreadsheets, screenshots, a thesis document, a post-mortem. That trail is unusually…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Emotional discipline in trading is almost always prescribed in the same form: you need more of it. The advice is delivered to people who have already tried. They have written the rules, made the commitment at eleven at night, and broken it at…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Why traders chase the market is a question that dissolves at the wrong timescale. Why traders chase the market looks, examined over a month, like a discipline problem: a trader who knows better and keeps doing it anyway. Examined over eleven minutes, it…
