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Cognitive Bias
psychologyA systematic pattern of deviation from rational judgment that affects trading decisions. Common examples include confirmation bias, recency bias, and loss aversion.
Related Terms
Fear
An emotion that causes traders to avoid entering valid setups, exit winning trades prematurely, or freeze during drawdowns.
Greed
An emotion that causes traders to hold positions past their profit targets, oversize positions, or chase extended moves.
Strategy Hopping
The destructive habit of switching trading strategies after a few losses instead of allowing the statistical edge to play out over a meaningful sample size.