Atlas of Cognitive Biases #21 · Information and beliefs. You look for proof that you're right
What it looks like in trading
once you're long, you only see bullish signals
reading analyses that confirm your scenario
explaining away contrary signals as “noise”
An example from a session
The trader's plan is a long from the VAL. When price reaches the level, they notice positive delta on one candle but ignore that the broad market is falling and the TICK is deeply negative.
What the research says
Peter Wason (1960) gave participants the sequence 2-4-6 and asked them to guess the rule. Most tested only examples consistent with their own hypothesis (“8-10-12”) instead of ones that could disprove it. In a review, Raymond Nickerson (1998) called confirmation bias one of the most pervasive errors of reasoning.
The tendency to seek out, notice and remember information that agrees with what we already think, and to ignore information that contradicts our beliefs.
How does confirmation bias show up in trading?
Typical signs: once you're long, you only see bullish signals; reading analyses that confirm your scenario; explaining away contrary signals as “noise”.
Educational content, not psychological advice or an investment recommendation.