You are sometimes your own worst enemy when it comes to trading and investing

Interesting video that explains how optimism bias can adversely impact trading and your life as well.

Some notable excerpts from the video

Illusion of control - people think that they often have control over events. But the fact is we
don’t actually have any control over the financial markets whatsoever.

The second problem with optimism is what behavioral experts call superiority bias its superiority bias which is also called the better-than-average fact is the idea that we tend to think of ourselves as better than average in a number of domains so we may think that we are more attractive smarter more generous as well.

There’s just a a feeling that we as humans have of exceptionalism that we all kind of think that we are a little bit above average and whatever we do. So the idea that hope springs eternal among people in whatever it is that we’re doing I think you know also applies to investing.


Episode 2

An investor’s worst enemy is not the stock market but his own emotions.

1 Like

I always advise the new traders that if they lose money on continuous base then they need to quit trading immediately as they are not suitable for this business. Some people are not born to trade at all and it is not wise to lose again and again. Am I right folks?