May 25, 2007
Avoiding Outcome Bias
More good stuff from a WallStrip interview, this time with Curtis Faith:
Lindsay Campbell: What is the biggest obstacle for most traders?
Curtis Faith: I would say faith in their own decision making. I think people second guess themselves too much. They might follow their strategy 95% of the time but it’s that 5% that they stop is almost invariably when they would have made a lot of money. Successful traders are able to avoid what’s known as the outcome bias which is the idea that you look at your decisions and say if I made money on this trade then I’m really happy and if I lost money on the trade then that means that I did something wrong.
Cat: | Time: 6:43 pm (utc+8)
May 25th, 2007 at 9:55 pm
I remember watching that episode and thinking that was a good comment too when Curtis said it.
May 25th, 2007 at 10:04 pm
KC: Curtis is a handsome bastard too, which lends credibility. ;-)