Outcome bias causes people to put too much emphasis on what
actually occurred rather than on the quality of the decision itself.
In trading, even a correct approach can result in losing trades, perhaps a few in a row.
These losses can cause traders to doubt themselves and their decision process, and they
then evaluate the approach they have been using negatively because the outcome of
that approach has been negative. The next bias makes this problem particularly acute.
actually occurred rather than on the quality of the decision itself.
In trading, even a correct approach can result in losing trades, perhaps a few in a row.
These losses can cause traders to doubt themselves and their decision process, and they
then evaluate the approach they have been using negatively because the outcome of
that approach has been negative. The next bias makes this problem particularly acute.
