Biases That Affect How You Trade Your System
(curated from "Trade your way to Financial Freedom" by Van Tharp)
1. Gambler’s Fallacy Bias
People assume that the probability goes up for a win after a long losing streak or up for a loss after a long winning streak.
(curated from "Trade your way to Financial Freedom" by Van Tharp)
1. Gambler’s Fallacy Bias
People assume that the probability goes up for a win after a long losing streak or up for a loss after a long winning streak.
2. Conservative-with-profits-and-risky-with-losses Bias
People want to take profits quickly & give their losses some room. This gives them the illusion of being right, but what they are really doing is cutting their profits short and letting their losses run.
People want to take profits quickly & give their losses some room. This gives them the illusion of being right, but what they are really doing is cutting their profits short and letting their losses run.
3. My-current-trade-or-investment-must-be-a-winner Bias
This bias may be at the root of all other biases. Yet being right has little to do with making money.
This bias may be at the root of all other biases. Yet being right has little to do with making money.
Above is just a glimpse from the fabulous book on Systematic Trading. It's a must read book if u want to become a serious system trader in stock market. 
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