By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer Hindsight bias in trading journals is the reason a diligent record can run for eight months and change nothing. The entries are honest. The trader is not lying to the page, and would pass a polygraph on every line. What has happened is subtler and…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Behavioural finance for traders is usually delivered as a glossary, and a glossary is close to useless at four in the afternoon with a position open. Twenty biases, each with a definition and a short example. The reader recognises most of them, finishes…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer| thewealthmirror.com The best behavioural finance courses online get chosen from a syllabus, usually in the week after a session that went badly, and the syllabus is the least informative thing about them. You have the module list open. Module four is the one that decided…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer| thewealthmirror.com Market crash psychology has produced one piece of advice, repeated in every downturn: stay calm, do not sell, this has happened before. The advice is not wrong about history. Broad markets have recovered from every decline so far, the people who sold at the…
By Sofia Harchich | Trading Psychologist & Behavioural Finance Writer | thewealthmirror.com Recency bias trading is easiest to detect not in what a trader thinks, but in the number they type into the size field. Ask most traders whether four winners in a row makes the fifth trade more likely to work, and the answer…
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 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…
