Trading Psychology

Confirmation Bias

The tendency to seek out and favor information that confirms an existing belief or position, while dismissing contradicting information.

Confirmation bias is the tendency to notice and weight information that supports an existing belief — or, in trading, a position already held — more heavily than information that contradicts it. This makes it genuinely harder to objectively reassess an existing trade.

See how confirmation bias affects traders holding existing positions in Trading Psychology 101: Fear, Greed, and Discipline.