What are Cognitive Biases & Behavioral Biases?

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To help traders and investors overcome the problem of emotions in decision-making, the first step is to be aware of the situations in which we might exercise flawed thinking, in the form of cognitive biases.

Cognitive biases are systematic errors in thinking that affect the decisions and judgments that people make, so they might think they are making logical and rational decisions, but in reality they are not, because the thinking/deduction process is flawed.

Once you are aware of these biases in your decision-making, it would be easier to find ways to avoid or overcome them.

If you would like to learn more about trading psychology, also check out: “The Complete Guide to Investing & Trading Psychology”

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Spencer Li

Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.