Mitigating Behavioral Biases in Trading

Loss Aversion: Use stop-loss orders to exit losing trades automatically, reducing the urge to “hold and hope.”

Confirmation Bias: Test strategies with backtesting or paper trading to validate ideas objectively.

Overconfidence: Limit position sizes and avoid over-leveraging, as discussed in #StrategyTrade StrategyTrade risk management posts.

Herding: Cross-check market sentiment with tools like fear/greed indices or volume analysis to avoid following the crowd blindly.