People tend to be either pessimist or optimist by nature. In this article, I look at a study that asked the following question: Optimists vs pessimists – who are the best investors and traders? The best investors and traders are probably not too pessimistic or optimistic. Both excessive pessimists and optimists are poor investors and…
The endowment effect is a well-known phenomenon in the field of behavioral economics, which states that individuals tend to place a higher value on items they already own compared to similar items they do not possess. This concept has significant implications for traders and investors, who may be prone to this bias, leading to poor…
Loss aversion is a phenomenon that affects many traders and investors, and can lead to negative consequences such as missed opportunities or emotional decision-making. In this article, we will explore what loss aversion is, why it happens, and how to overcome it. By the end of this article, traders will have a better understanding of…
Trading bias or behavioral mistakes, you better have an understanding of the most common ones. When your money is at risk, you easily get fooled by your behavioral biases. Trading is about decision-making, and you better understand your strengths, weaknesses, and what puts your emotions on fire. This article explains the most common trading biases,…
(Some personal and random thoughts on day trading (from 2013) – by Oddmund Groette) I love day trading! I have day traded for over twelve years and I still like what I do. Actually, I love it! Day trading is some kind of addictive. I need my daily shot with research and trading. My day…
Because of drawdowns and trading biases you might not succeed even with the best trading strategies on the planet. Empirical evidence suggests that the main obstacle for most traders and investors is our in-grained biases (cognitive errors). If you want to read more about this subject, we recommend Rolf Dobelli’s The Art Of Thinking Clearly….
A trading plan refers to having a framework th
