Traders may suffer from overconfidence bias from "summary" of Advances in Behavioral Finance by Richard H. Thaler
The overconfidence bias is a common psychological phenomenon that affects traders in financial markets. This bias leads individuals to believe that they have more knowledge and skill than they actually possess, causing them to take excessive risks in their trading activities. As a result, traders may make poor investment decisions based on their inflated sense of ability, leading to financial losses. Traders who suffer from overconfidence bias tend to overestimate their ability to predict market movements and make profitable trades. They may disregard important information or fail to conduct thorough research before making investment...Similar Posts
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