Confirmation Bias
Tendency to only notice what supports our beliefs and ignore contradictory evidence.
Beginner-friendly explanation
Confirmation bias is when you only look for information that supports what you want to believe and ignore the rest. Example: You think BTC will rise, so you read only bullish news and ignore bearish analyses.
Intermediate-level insight
This bias leads traders to interpret market signals selectively, validating only what supports their original view. It may prevent them from seeing trend reversals. Example: A long trader sees a red candle but convinces himself it's just a “pause,” because he wants to stay in the trade.
Advanced perspective
Confirmation bias amplifies cognitive dissonance: the stronger the belief, the more contradictory data is unconsciously filtered out. To counter it, one must adopt a critical stance, actively analyze opposite scenarios, and formalize assumptions. Example: An experienced trader writes down what would invalidate their trade at entry. This forces them to consider all outcomes and reduces bias impact.
Trader Psychology & Behavior
confirmation bias, cognitive dissonance, selection, belief, filtering, self-justification, selective perception