Trading is all about adjusting to your surroundings regardless of what your mind is telling you to do. In fact your mind is almost always going to steer you in the wrong way. I’ve really had to relearn this the hard way these past few months but despite the mild drawdown in my account I’m very optimistic about my trading going forward.
A decision matrix for self-attribution bias looks something like this:
.? |
| ? |
Good Outcome |
Bad Outcome |
| Right Reason |
Skill |
Bad luck |
| Wrong Reason |
Good luck |
Mistake |
| ? |
? |
? |
|
- When are you lucky and when are you skillful?
- Are you right for the “right” reason, or are you right for some other reason?
- Does it matter, as long as you are right?
- How do you measure and “fess up” to mistakes—i.e., recognize mistakes as mistakes by taking personal responsibility and accumulating regret?
- Is it important to do this, and why or why not?
- What are some other biases that affect your trading results?
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