A Thread on Illusion of control π§΅π
1/ People have a tendency to believe that they can somehow influence the outcome of a totally uncontrollable event. They have this sense of control over a situation which, in reality, can lead to completely random outcomes.
2/ This bias leads to Overconfidence and Higher than usual optimism, both of which are again behavioral biases. This happens a lot in general life as well as in stock markets.
3/ Suppose you think you are good at executing a certain strategy on a stock, you put a lot of money in that one single trade which can lead to a huge loss that goes completely against your basic risk management parameters.
4/ In the above case, you were too sure about your strategy and thought you had control over the market when that was never the case.
5/ Conclusion - Events occurring in markets and life are uncertain and uncontrollable. A stock can go up on bad earnings and vice versa. Having an Illusion of control can lead to bad outcomes be it in investing or in life.
If you want to know Whether you have predicted the right future of a stock or not ? Checkout this π
https://twitter.com/FinsenseG/status/1303547779185143808?s=20
BY :- @RJGyanchandani
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