Showing posts sorted by relevance for query avoiding-confirmation-bias-with-market. Sort by date Show all posts
Showing posts sorted by relevance for query avoiding-confirmation-bias-with-market. Sort by date Show all posts

Monday, January 14, 2019

Info!! Avoiding Confirmation Bias Alongside Marketplace Pose Coin Menses As Well As Breadth

Confirmation bias is the style to essay data that fits our preexisting views.  The contrary of confirmation bias is opened upwards mindedness in addition to the commitment to essay data that counters one's perspectives.  

At marketplace highs in addition to lows, in that location is no lack of data to confirm bullish in addition to bearish biases.  At the highs, the economic scheme looks strong, profits are solid, in addition to persuasion is favorable.  At the lows, fears abound; utter of recession in addition to crisis dominates.  

It's when actual marketplace deportment deviates from these biases that nosotros honor opportunity.

Above is a nautical chart of coin stream for the SPY ETF, which is a purpose of the daily closing cost in addition to the release of SPY shares outstanding.  When traders are bullish, their require creates novel ETF shares; when bearish, nosotros come across a contraction inward shares outstanding equally shares are redeemed.

Note how coin stream peaked inward belatedly 2014 in addition to moved steadily lower during 2015 earlier the marketplace declines belatedly that yr in addition to early on this year.  Bearish coin flows, along amongst breadth declines, were amid the factors leading me to fade forcefulness during this period.

Now, however, we're seeing the contrary phenomenon.  With the 2016 marketplace declines, SPY coin stream is genuinely belongings inward a higher house its August, 2015 levels.  Moreover, at the Feb lows for SPY, we've seen fewer stocks register novel lows relative to January.  Specifically, nosotros had 1226 novel three-month lows across all exchanges on Feb 11th, compared amongst 2663 lows on Jan 20th.  The Feb lows saw 19.36% of SPX shares trading inward a higher house their 200-day moving averages, compared amongst 17.76% at the Jan lows.  Among SPX shares, nosotros had 101 to a greater extent than 100-day novel lows than novel highs at the Feb lows, compared amongst 151 to a greater extent than lows than highs inward January.

Bearishness has abounded, amongst concerns over high yield credit, fossil oil prices, European banks, weak Communist People's Republic of China in addition to EM, in addition to questions over the effectiveness of the monetary policies of fundamental banks.  Despite these factors, it is hard to honor bear witness of recent weakening inward the United States of America of America stock market.  That leaves me opened upwards minded to the possibility that we've pose inward an intermediate-term depression inward stocks, fifty-fifty equally I too portion concerns over the global macro picture.

Further Reading:  Measuring Sentiment With Options
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Saturday, November 2, 2019

Info!! Trading Psychology: The Best Of 2009 - Book Four

With this posting, nosotros twine upwardly the catalog of best trading psychology posts from this weblog during 2009. Here is where you lot tin abide by the best of the 1st quarter, 2nd quarter, as well as 3rd quarter. You tin every bit good abide by the best posts from 2006, 2007, as well as 2008, every bit good every bit a collection of posts on trading indicators as well as methods.


* A Cognitive Strategy for Overcoming Frustration; come across every bit good a Solution-Focused Strategy for Dealing alongside Frustration;

* Finding Freedom inwards Commitment

* Being Right vs. Being Profitable

* Life Problems that Become Trading Problems

* Living for Trading vs. Trading for a Living

* The Power of Market Metaphors

* Ten Qualities of Successful Traders

* Avoiding Confirmation Bias inwards Trading

* How to Avoid Going on Tilt

* The Psychology of Position Sizing

* The Best Projective Test of All; come across every bit good Life every bit a Projective Test

* Why Traders Don't Make More Money

* Trading From a Position of Power

* Reducing Bias inwards Trading

* Preparing to Win

* The Value of Previewing as well as Reviewing Markets

* Discovering Your Trading Patterns

* Managing Your Psychological Energy

* Preparation as well as the Perception of Time

* Setting Trading Goals

* A Theory of Romantic Relationships

* Learning to Shift Emotional Gears

* Well-Being as well as Frustration; come across every bit good Goal Setting as well as Frustration

* Novelty as well as Psychological Change

* The Value of Trading every bit a Performance Activity

* Why Traders Keep Losing Money

* What Moves Markets; come across every bit good More Perspectives on What Moves Markets

* Biofeedback Applications for Traders

* Visualization Practices for Traders

* The Psychology of Return Paths

* Hard Lessons for Traders

* Why Quiet Markets Reveal Good Traders

* Turning Human Performance Into a Lifestyle

* Market Awareness as well as Self Awareness
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