AVOID THESE Cognitive Errors in Technical Analysis!

<p>Being aware of these cognitive errors in Technical Analysis is crucial to becoming a successful trader. It's all about training your mindset 🙏 &nbsp;</p> <p><br></p> <p>🚀 Join the VIP Membership Group (Discord) today! ► https://fiveorlessfinance.com/&nbsp;</p> <p><br></p> <p>Conservatism bias: too little weight given to new information &nbsp;Your prior beliefs are not modified as much as new information warrants. You conserve prior beliefs. i.e. despite signs that the economy starts to emerge from recession you remain pessimistic and underinvested in equities. &nbsp;Confirmation Bias: an investor’s beliefs become more extreme over &nbsp;&nbsp;&nbsp;time. Confirmatory information is given more credence, contradictory info not believed. &nbsp;i.e. any negative news validates your negative bias. &nbsp;</p> <p><br></p> <p>Anchoring: an individual’s inability to sway from initial estimates, forecasts, opinion, personal biases (an anchor) even if they are irrelevant and not evidenced based, sizing a prediction based on numbers previously given. Anchoring is usually to a story, starting value of account size, anchoring yourself to your purchase price (inconsequential), anchoring to target price Ex: Anchoring to compelling emotional stories, numbers (your break even price, &nbsp;initial account balance, price targets set by analysts, prior highs, your account values) **It is my experience that this is probably the biggest factor leading to investment loses &nbsp;</p> <p>Optimism / Overconfidence: Investors are generally overconfident about the quality and precision of their knowledge. i.e. analysts, portfolio managers, and traders. &nbsp;Crime of small numbers: using too small of a sample size to draw a conclusion resulting in two judgment errors:&nbsp;</p> <p>Gambler’s fallacy: occurrence of a positive streak does not alter the probability of the next event. Example: coin toss Gambler’s fallacy: coin toss stays 50% even after tails 20 times in a row&nbsp;</p> <p>Clustering illusion: Misperception of order, when the o