**Confirmation Bias - Let's be real, you're not analyzing the market, you're just finding excuses for your position.**
**Confirmation Bias - 'I said it would rise, right?' - How long after saying that did it start to drop?**
📖 This episode's term: Confirmation Bias
🎯 Difficulty: ⭐⭐ (Advanced Beginner)
🔥 Emotional Danger Index: 🔥🔥🔥🔥 (Level 4)
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### ❓ What is this (Layman's definition)
It's when you already have a 'bullish' or 'bearish' prediction in your mind that you subconsciously only seek information that supports your viewpoint while ignoring contradictory evidence.
For example, when you buy a long position, you will search everywhere for articles on 'bullish', 'golden cross', and 'whale buying'; at the same time, when you see news about 'top divergence', 'whales dumping', or 'regulatory bad news', you will automatically filter it out or tell yourself 'this time it's different.'
Let's be real, confirmation bias is: **you're not analyzing the market, you're just looking for cheerleaders for your position.**
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🧠 Real Trading Scenario (You've definitely experienced this)
“Not long ago, I was bullish on ETH, thinking the market would bounce back, so I opened a long position. After opening the position, I was like a spring, searching everywhere for evidence that 'ETH will rise'.
I saw a KOL say 'ETH weekly golden cross', so I quickly took a screenshot; I saw a whale address transferring to an exchange, thinking 'they're about to pump it'; I saw someone shout 'ETH will hit 5000', feeling like I finally met someone who understood the market.
But at the same time, I also saw another analysis - 'ETH daily volume is insufficient, watch for retracement risks.' My immediate reaction was: 'This person doesn't know what they're talking about, they can't see the trend.'
So what happened? ETH dropped 15%, I held on for three days, and finally cut my losses. After losing everything, I went back to look at that 'unqualified' analysis, and they were completely right.
Let's be real, the market didn't fail to warn me; I just covered my eyes.”
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### 📌 Why is it harmful?
- It turns you into an 'information sieve': the information you receive from the market should be comprehensive, but confirmation bias acts like a filter, only letting in what supports you and throwing out what contradicts you. As a result, you become increasingly 'confident' while drifting further from the truth.
- It makes you stubborn about being wrong: when you only see evidence that supports you, you feel 'my judgment is correct, it just hasn't materialized yet'. Thus, when it's time to cut losses, you choose to hold on, and when it's time to exit, you choose to double down.
- Exacerbating position control failure: the more evidence you seek, the more confident you become, and the heavier your position will be. The heavier your position, the more evidence you need to find to comfort yourself—this is a vicious cycle.
- Missing trend reversal signals: the trend has already changed, but you’re still looking for evidence that 'it will go back'. By the time you finally admit it, your account has already lost a large portion.
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### 💊 Antidote (3-step practice, finish this before you speak)
1. Force yourself to write 'opposing viewpoints' before opening a position
Before you open a position, write down at least **3 reasons that oppose your viewpoint** in your memo. For example, if you want to go long, you need to find 3 bearish signals or logic. If you can't find any, it means you haven't analyzed comprehensively; you're just being wishful. Once identified, seriously ask yourself: Can I handle these risks?
2. Find someone who specifically 'debunks your ideas'
In your trading circle, find a friend with an opposing style or someone who enjoys playing devil's advocate. Every time you have a judgment, first take it to them for a reality check. Not to argue about who's right or wrong, but to force yourself to hear a different perspective. If you can't find such a person, follow a few opposing KOLs and make yourself read their analyses.
3. Set a 'reverse validation' time
After opening a position, every hour, spend 2 minutes specifically looking for 'signals that your current position might be wrong'. Once you find them, objectively assess: how significant are these signals? If I were to close my position now, would I open a new one here? If the answer is 'no', close the position immediately.
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### 🧘 Mindfulness Exercise (Can be done in 30 seconds)
When you find yourself frantically searching for 'bullish' articles, screenshots, or group chat logs to comfort yourself—
Close your eyes, take a deep breath. Silently repeat:
“Evidence won't become true just because I search for it more. The market owes me no returns. What I need is not more 'support votes', but an honest 'opposition vote'.”
Then open your eyes and immediately search for 'short + your coin', forcing yourself to read an entirely opposing viewpoint.
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### 📝 Key Takeaway
You're not watching the charts; you're just searching for evidence for your position. And the market doesn't care what you think.
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### 🗣️ Reflection Questions for this Issue (Comment Interaction)
“Have you ever had that experience where you clearly see the risk signals but pretend not to see them, only to end up losing money? Share in the comments, let's wake each other up.”
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