Confirmation Bias is Normal, but Dangerous for Investors ☝️


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Confirmation bias in Trading and Investing. http://www.financial-spread-betting.com/strategies/strategies-tips.html PLEASE LIKE, SUBSCRIBE AND SHARE THIS VIDEO TO SUPPORT US.
Confirmation bias is normal but can be dangerous for traders and investors. Confirmation bias, also called confirmatory bias or myside bias. This is when we seek to reinforce our belief in something as opposed to looking at it objectively. This can be dangerous. If you are already positive about a market or trade, when negative news comes out you will tend to dismiss it as being irrelevant. And when positive news you may use it to reinforce your position.

How Investors Suffer From Confirmation Bias

I’ve been guilty of this and you might be guilty of this too. You have a position on a stock and you see some news on google news or such about your stock. If its confirming your trade direction you will nod your head and say ‘yes that makes sense, that’s one of the reasons i’m in this stock’. But if its negative news you will try to find reasons why that news is false or not relevant to your position. Being objective gives you far more flexibility.

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