Atlas of Cognitive Biases #63 · People and ego. You overvalue what's yours
What it looks like in trading
attachment to your own system despite poor results
rejecting proven rules because “I have my own method”
difficulty deleting your own indicator
An example from a session
A trader spends six months building their own set of indicators. When the data shows it gives no edge, it's hard to abandon: they've put too much work into it (the sunk cost fallacy) and feel it's “theirs” (the IKEA effect).
What the research says
Norton, Mochon and Ariely (2012): participants who assembled IKEA furniture or origami themselves valued it far more highly than identical items assembled by someone else. Katz and Allen (1982) described the “not invented here” syndrome in research teams.
Overvaluing what we created ourselves and undervaluing ideas from outside.
How does the IKEA effect and “not invented here” show up in trading?
Typical signs: attachment to your own system despite poor results; rejecting proven rules because “I have my own method”; difficulty deleting your own indicator.
Educational content, not psychological advice or an investment recommendation.