01 — Cognitive Biases

Confirmation Bias#

◐ Behavioral
◆ The PatternThe tendency to search for, interpret, and remember information that confirms your existing beliefs — while ignoring contradictory evidence.

Confirmation bias is the tendency to search for, interpret, and recall information that confirms existing beliefs.

In trading: You believe Tesla will go up → you read only bullish analyses → ignore bearish data → feel increasingly "certain" → but your certainty is built on a filtered dataset.

Mitigation: Actively seek the strongest opposing argument. Write down what would make me wrong before every trade. Track whether your "confirming" sources were actually predictive.

Pattern bridge: Seeing what you expect to see is high bias in ML — the model only fits its prior assumption.
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