weekend aftermarket lounge end of winter yea, page-15

Afternoon traders, hope you all had a successful week. Just read a book by the Chip and Dan Heath "Decisive". They discuss the 4 Villains of Decision Making and thought I'd try to relate it to our own area of trading.

1. Narrow Framing - widen your options, don't just focus on that one stock you've made a commitment to, take into account other ideas, opinions; diversify. Consider opportunity cost in staying with the trade, get some distance, find a trusted mentor.

2. Confirmation bias – wishful thinking, instead of looking for notions that support your choice, examine the opposite case to poke holes in your theories, test it, search for trustworthy info. Need to discipline selves to find opposing points of view.

3. Short term emotions – is that immediate reaction based on pure hype and excitement, do you need to filter it thru your reasoning processes, are you skilled/quick enough to scalp, daytrade.

4. Overconfidence – are you sure? Are you prepared to be wrong? Is it smart to average down? Capital risk?