[Trading Journey] đ§ Are you trading with confirmation bias?
You read the news. Market sentiment is bullish. You open the chart, and the price action looks like itâs going up.
Youâre set on a LONG trade â and your mind starts⊠hunting for signals to back it up.
Price is rising, then you spot one, two candles pulling back.
A pin bar appears â âHere it is, a reversal!â
You draw Fibonacci, tweaking it to fit the 0.5 level.
MA 50 is right there â âPerfect, time to enter!â
đ But then, the price dumps. Your stoploss gets hit.
Youâre baffled: âHow did I analyze it right and still lose?â
The truth? You wanted to LONG from the start. Your mind cherry-picked signals to justify it, ignoring anything that didnât fit.
đŻ Thatâs confirmation bias â the trap of seeing what you want to see.
Youâre not reading the chart objectively.
Youâre driven by emotions and desires.
And thatâs the fastest way to blow your account.
â How to escape the confirmation bias trap?
- Challenge yourself: If youâre set on LONG, find reasons why NOT to LONG. If you canât find solid reasons, thatâs a real setup.
- Analyze both sides: Always evaluate bullish and bearish scenarios, even if you lean one way.
- Stick to a checklist: Every trade must pass a fixed set of criteria. If it doesnât, stay out.
- Separate analysis from emotions: Write down your analysis before entering a trade to avoid tweaking it on the fly.
â Next time you analyze a chart, ask yourself:
âAm I reading the chart, or just seeing what I want to see?â