Psychological Bias – 1.Over Confidence Bias
First lesson in psychology is to watch out for trading satisfaction. Humans are self-concentrated and want to be recognized to people as better person than others. It is an obsessive behavior that leads to your losses. overconfidence is dangerous emotional state to traders that over-inflates belief in yourself.
These thought leads to reinforcement of self-love. It is very common for winning traders and believe can’t get anything wrong in the future. This will lead traders to failure in the end. self-esteem gives positive energy for us to progress through life. But definitely, there is a difference between confidant and being overconfident.
To improve your trading skills, you need to admit that you made mistake. It is also important to analyze your trading sessions and look at your wins and losses. You have to be comfortable with accepting that mistakes you made are common among new traders, and it is part of the learning.