The Silent Bias That Repeats Your Worst Trades

Anand Siva Kumar
May 30
2 min read

You tell yourself you’ve learned your lesson. You won’t chase the breakout again. You’ll follow your stop-loss this time. You won’t size up on a whim.

And yet — you do.

Maybe not every day. But often enough to wonder: “Why do I keep doing what I know I shouldn't?”

That, right there, is confirmation bias at work.

🎯 What Is Confirmation Bias in Trading?

It's simple — and dangerous. Confirmation bias is your mind's tendency to seek out information that supports what you already believe… while ignoring everything that doesn’t.

In trading, that means:

You see a setup that you like, so you go hunting for indicators that agree.
You ignore the news that contradicts your position.
You stay in a losing trade because one random tweet matches your original view.

You’re not analyzing the market anymore. You’re defending your ego.

Why It Feels So Natural (But Isn’t Helpful)

Your brain isn’t wired for objectivity — it’s wired for consistency. Once you’ve made a decision, your mind doesn’t want to revisit it. It wants to feel “right.”

But in the markets, feeling right doesn’t pay.

Recognizing confirmation bias takes practice. It’s not loud. It doesn’t scream. It whispers — subtly — reinforcing your bias just enough to keep you blind.

How It Traps You in a Cycle

You enter a trade based on your “conviction”. You ignore signs of reversal. You justify holding with random signals. You book a loss — or worse, average into it. You vow never again.

Next setup comes… and the cycle begins again.

What I Do Differently Now

I used to be that trader — chasing setups, filtering information, refusing to let go. Now, I build my system to counteract my bias, not feed it.

Here’s what helps me:

I write down both bullish and bearish possibilities before every trade.
I check a bias checklist before confirmation (e.g., “Am I ignoring a key signal?”)
I have a rule: if I’m too emotionally attached to a trade idea, I pass on it.

Because clarity comes not from control, but from conscious observation.

A Simple Exercise for You

Next time you're about to enter a trade, pause. Ask yourself:

“Am I analysing… or just justifying?”

And then write down:

1 reason to take the trade
1 reason not to take it

If you can’t find a reason against it, you’re not thinking clearly. You’re just proving yourself right.

Final Thought

You don’t rise above your biases overnight. But once you start noticing them, they lose power.

Trading is not about being perfect. It’s about being aware — especially of what your mind wants you to ignore.

Rewire. Reflect. Rise.— Anand Siva Kumar, CMT, ERP Author, TraderPsyche