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.