Atlas of Cognitive Biases #13 · Overconfidence. You don't control the market
What it looks like in trading
frequently moving orders “to help” the trade
believing that watching every tick will improve the result
believing that timing your entry to the second is crucial
An example from a session
The trader sits non-stop from the 9:30 AM open to the 4:00 PM close, because “if I leave, something will happen”. But they control only their process: the plan, the size of the risk and their reactions. Nobody controls the market.
What the research says
Ellen Langer (1975): people who chose their own lottery ticket demanded several times more to sell it back than people who were assigned one. Fenton-O'Creevy and colleagues (2003) studied traders at London investment banks: a stronger illusion of control was associated with worse performance and lower ratings from managers.
Overestimating our influence over events that largely depend on chance. Activity gives a sense of control even when it changes nothing.
How does the illusion of control show up in trading?
Typical signs: frequently moving orders “to help” the trade; believing that watching every tick will improve the result; believing that timing your entry to the second is crucial.
Educational content, not psychological advice or an investment recommendation.