65-Day Academy · Day 36 · Psychology & Biases
Confirmation Bias — the Echo Chamber
The mechanism
Once you own a position (or an opinion), you start collecting evidence FOR it: the bullish article gets read, the bearish one gets dismissed as FUD. Social media industrializes this — your feed learns your bias and feeds it back. The result is a thesis that has never faced a real opponent, discovered to be wrong only by the market.
The steelman discipline
The professional habit: before entering, write the STRONGEST case against your trade (the steelman) and what would specifically falsify it. If you cannot write a bear case that would genuinely worry you, you have not researched the trade — you have marketed it to yourself. Positions with a written falsification condition are checkable; positions without one are beliefs.
What you'll practise
True or false: a good pre-trade ritual includes writing down what evidence would prove you wrong.
10 XP in the app · introductory
Sources
- SuperforecastingPhilip Tetlock & Dan Gardner
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All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.