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The back fire effect: What you need to know

Backfire effect: What you need to know

This week I wanted to share an article that I came across and it’s about the backfire effect, a cognitive bias that has caught a lot of attention recently.

If you don’t know what’s a cognitive bias, it’s a limitation in objective thinking that is caused by the tendency for our brain to perceive information through a filter of personal experience and preferences.

That filtering process is essentially a coping mechanism that allows the brain to prioritize and process the vast amount of input it receives each second.

While this mechanism is there to protect us, it can cause errors in judgment and decisions that can lead to consequences.  

The backfire effect is a form of cognitive bias that this article explores. Rather than use the article to come up with my own explanation of the backfire effect, I just thought that I’d share it directly. It is an enjoyable and simple read that does a much better job at explaining what that cognitive bias is all about.

Read it and I’ll let you think of how this psychological bias is affecting your behavior in trading.

I hope to read your comments below.

 

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Yvan
I've been trading for a living since 2006. By merging mindfulness (an in-depth study of the mind and its tendencies in the present moment), a good trading process, and an efficient business practice, I went from being a losing trader to a consistently profitable one. Through my work here at Trading Composure, I aim at helping you do the same.
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  • Shashank G

    This is Quality Yvan. I made it a point to visit everyday this site and read at least one post .

  • Shashank G

    Can relate to all my trading mistakes (big draw down days to this). I let my little brain have its way :)…

    • Thanks for the comment Shashank. Yes, and it happens to even the best of us. That’s why I strongly believe in the importance of a systematic approach. We, humans, are fallible and there’s just so many things that affect our decisions and actions from moment to moment that it is best to employ an approach to trading that takes most decisions out of our hands.