In this video, you will learn about confirmation bias and how to avoid falling for it.
#confirmationbias #decisionmaking #wallstreetmojo #trading #investing
Chapters:
00:00 – Introduction
00:25 – What is confirmation bias
01:31 – Real-life scenarios
03:54 – How to avoid falling for confirmation bias?
05:04 – Conclusion
What is confirmation bias?
Confirmation bias is a cognitive function of our brain that makes us favor our already existing beliefs and biases over any new piece of information that refutes our bias.
The concept of bias is widely studied in psychology and could be both good and bad. It all depends on the context and the situation.
(Explained in detail in the video)
Real-life scenarios?
Confirmation bias isn’t just a concept in psychology but is also observed in behavioral finance.
In the video, we have discussed a couple of scenarios where investors may fall for confirmation bias and how it may cost them.
How to avoid falling for confirmation bias?
To avoid falling for confirmation bias, you should be flexible with your decision-making approach and consider information that refutes your bias. Don’t just shun them away just because it says something that goes against you.
So please do your research, make sure it’s deep research that considers everything, and be flexible and open to new pieces of information. That’s how you avoid falling for confirmation bias.
(Explained in detail in the video)
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