Atlas of Cognitive Biases #61 · People and ego. Others don't think the way you do
What it looks like in trading
“everyone can see this level, so the market has to react”
believing other traders trade the way you do
surprise that someone takes the opposite position
An example from a session
A trader is sure that everyone sees an “obvious” level the same way. But the market is made up of participants with different horizons: market makers, funds, algorithms, day traders. Each of them sees something different.
What the research says
Ross, Greene and House (1977) asked students to walk around campus wearing a sandwich board. Both those who agreed and those who refused believed that most other people would have done the same as them.
Overestimating how much other people share our opinions and ways of acting.
How does the false consensus effect show up in trading?
Typical signs: “everyone can see this level, so the market has to react”; believing other traders trade the way you do; surprise that someone takes the opposite position.
Educational content, not psychological advice or an investment recommendation.