{"id":33352,"date":"2013-11-03T19:43:37","date_gmt":"2013-11-04T00:43:37","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=33352"},"modified":"2023-08-02T16:38:30","modified_gmt":"2023-08-02T20:38:30","slug":"confirmation-bias-and-trading","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/confirmation-bias-and-trading","title":{"rendered":"Confirmation Bias and Trading"},"content":{"rendered":"<p>******One blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading is David Blair, The Crosshairs Trader. Below is his latest post for the SMB Trading Community. We hope you enjoy!****** \u2014 Editor\u2019s note<br \/>\n&#8212;<\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">When it comes to trading, enhancing our performance inside the charts\u00a0requires an awareness of various \u201coutside the charts\u201d thought processing biases that can adversely affect our outcomes. Like all biases we may not be aware of\u00a0their effects until an emphasis is placed on getting to know ourselves better. Fortunately, we have at our disposal\u00a0much research conducted about our biases. However, mastering our thought processes requires that we face our weaknesses head on. One such weakness is the tendency to only seek out information that confirms our beliefs, thus blinding us to other alternatives and, in many cases, the truth. This is known as <a href=\"http:\/\/en.wikipedia.org\/wiki\/Confirmation_bias\" target=\"_blank\" rel=\"noopener\">confirmation bias<\/a>. For example, a trader who is in a losing position will seek out any\u00a0information, be it news-related or indicator-driven, that confirms that he is right and the market is wrong. Oftentimes, this will lead to greater losses\u00a0as reality trumps\u00a0biased expectations. For those who wish to\u00a0face confirmation bias head on\u00a0the following sources should help on the road to discovery and enhancement.\u00a0 <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">How The Oracle Of Omaha Avoids the Confirmation Bias Trap (<a href=\"http:\/\/www.forbes.com\/sites\/rogerdooley\/2013\/05\/07\/buffett-confirmation-bias\/\" target=\"_blank\" rel=\"noopener\">Forbes<\/a>)\u00a0 <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">According to Jason Zweig the Mind is a Terrible Thing to Change (<a href=\"http:\/\/online.wsj.com\/news\/articles\/SB10001424052748703811604574533680037778184\" target=\"_blank\" rel=\"noopener\">WSJ<\/a>) <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">How to Lose 2 Million Dollars Through Confirmation Bias (<a href=\"http:\/\/www.robertsinn.com\/2011\/03\/05\/how-to-lose-2-million-dollars-through-confirmation-bias\/\" target=\"_blank\" rel=\"noopener\">The Stock Sage<\/a>) <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">The Science of Not Believing (MotherJones) <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">Confirmation Bias is All Around Us (<a href=\"http:\/\/www.spring.org.uk\/2013\/06\/the-confirmation-bias-why-its-hard-to-change-your-mind.php\" target=\"_blank\" rel=\"noopener\">PsyBlog<\/a>) <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">Confirmation Bias is Really Bad For the Investor (<a href=\"http:\/\/practicalstockinvesting.com\/2012\/12\/04\/confirmation-bias\/\" target=\"_blank\" rel=\"noopener\">Practical Stock Investing<\/a>) <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">How Traders Can Avoid Confirmation Bias (TradersPlace) <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">Stock Message Boards Are a Breeding Ground for Confirmation Bias (<a href=\"http:\/\/misrc.umn.edu\/wise\/papers\/p1-3.pdf\" target=\"_blank\" rel=\"noopener\">JaeHong Park\u2014White Paper<\/a>)\u00a0 <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">Check Your Probabilities at The Door (<a href=\"http:\/\/finance.yahoo.com\/news\/confirmation-bias-check-probabilities-213524551.html\" target=\"_blank\" rel=\"noopener\">YahooFinance<\/a>) <\/span><\/p>\n<p><span style=\"font-family: Trebuchet MS; font-size: small;\">Your Need to Win Is a Symptom of Confirmation Bias (<a href=\"http:\/\/traderfeed.blogspot.com\/2009\/10\/avoiding-confirmation-bias-in-trading.html\" target=\"_blank\" rel=\"noopener\">TraderFeed<\/a>) <\/span><\/p>\n<p><b>David Blair<\/b><\/p>\n<p><b> THE CROSSHAIRS TRADER<br \/>\n<\/b>www.thecrosshairstrader.com<br \/>\nhttp:\/\/www.<wbr \/>thecrosshairstrader.com\/<wbr \/>crosshairs-blog\/<\/p>\n<p>Related blog posts:<br \/>\n<a href=\"http:\/\/www.smbtraining.com\/blog\/the-eight-principles-of-elite-traders\"> The Eight Principles of Elite Traders<\/a><br \/>\n<a href=\"http:\/\/www.smbtraining.com\/blog\/enhancing-performance-with-bias-awareness\">Enhancing Performance With Bias Awareness<\/a><\/p>\n<p>No relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>******One blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading is David Blair, The Crosshairs Trader. Below is his latest post for the SMB Trading Community. We hope you enjoy!****** \u2014 Editor\u2019s note &#8212; When it comes to trading, enhancing our performance inside the charts\u00a0requires an awareness of various \u201coutside the &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/confirmation-bias-and-trading\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":1042,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1935,1,1532,455],"tags":[1737,1873,3521,38],"class_list":["post-33352","post","type-post","status-publish","format-standard","hentry","category-david-blair","category-general-comments-2","category-guest-blog","category-trading_psychology","tag-confirmation-bias","tag-conviction","tag-david-blair-2","tag-trading","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Confirmation Bias and Trading | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/confirmation-bias-and-trading\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Confirmation Bias and Trading | SMB Training\" \/>\n<meta property=\"og:description\" content=\"******One blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading is David Blair, The Crosshairs Trader. Below is his latest post for the SMB Trading Community. We hope you enjoy!****** \u2014 Editor\u2019s note &#8212; When it comes to trading, enhancing our performance inside the charts\u00a0requires an awareness of various \u201coutside the ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/confirmation-bias-and-trading\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2013-11-04T00:43:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-02T20:38:30+00:00\" \/>\n<meta name=\"author\" content=\"David Blair\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"David Blair\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" 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