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12 Cognitive Biases that Prevent you From Being Rational

Confirmation Bias – The tendency for people to favor information that confirms their beliefs or ideas.  Investors and economists often fail to fully appreciate other views due to a narrow minded view of the world often resulting from what they think they already know.

Ingroup bias – the tendency to favor one’s own group.  In investing and economics we see this in ideologies and particular strategies.  Austrians favor those who believe their own thinking.  Chartists dislike value investors.  Often times, the strongest economists and investors are the ones who are able to move beyond this ingroup bias and explore the potential that other groups have something positive to contribute.

Gambler’s Fallacy – When an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events.  We see this in trading all the time.  This is the belief that just because something has occurred in the past that it is more likely to occur in the future.  The “trend is your friend” and that sort of thing….

Post-Purchase Rationalization – When one rationalizes past purchases after the fact in an attempt to justify past actions.  Investors often learn about how a bad trade turns into an investment when they rationalize their past purchases.  If you’ve been in the business for a while you know how destructive this can be. (more…)

I Trade In The Zone.

  1. I Trade In The Zone’. I Trade IN The Moment, IN The Present, With Total Disregard For What Others Think & Feel About Me.
  2. ‘I Trade In The Zone’. I Ignore ALLEmotions & Defensive Perspectives. I Trade; I Do, I Act From An Entirely Detached & Impartial Perspective.
  3. ‘I Trade In The Zone’. Only In The Zone Do I See The Market As It Truly Is.
  4. ‘I Trade In The Zone’. I Block Out ALL Bad Habits & Self-Limiting Beliefs Attained From My Past, My Environment & Their Surrounding Noise.
  5. ‘I Trade In The Zone’. My Mind Is Pure, Clear, Focused & Yet Empty. The product Of‘Choice’ Means I ALWAYS Can; At Will, ‘Trade In The Zone’.
  6. ‘I Trade In The Zone’. I Trade Without Ego, Never Reacting To Pain, Sorrow Or Fear. I Just Trade The Market As It Truly Is. I Am A Super Trader, I Am The Master Of My Emotions, & So I Can Trade In The Zone. ‘I TRADE IN THE ZONE’.
  7. ‘I Trade In The Zone’. Trading In MY Zone Means I Distinguish Actual Reality From My Interpretations & Projections Of Reality. I Control The Zone!
  8. ‘I Trade In The Zone’. Only In The Zone, My Centred State, Can I ‘Super Trade.’ I Flow With Trends, I Spot Reversals & Breakouts; I Cut Losses Without Hesitancy & Let My Profits Run Perpetually. ‘I Trade In The Zone’.
  9. The Zone Is Where I Live; It’s My Nirvana, My Sanctuary, My Paradise, My Heaven.
  10. I LIVE & TRADE In The Zone. The Zone Is In Me; & The Key To Enter Is Within Me Forever!