Why when we look at the 8th trading signal do we allow the outcome of trades 1 to 7 to influence our decision? Because your perspective changed. It was coloured by your experience of the previous 7 trades. This is highly illogical decision making behaviour and it costs traders thousands in missed opportunities. This week we explore this common psychological bias and discuss how to get around it in order to improve your trading results.
The CLEAN Trader podcast was created by active trader Chris Chillingworth to share insight, ideas, tips and experience on how to improve as a mechanical systematic trader. Self described as a british bearded trader who likes rock music, wine and formula one racing.
Mechanical Systematic trading is a strategy that does not make predictions on the stockmarket, but instead looks at reacting to what the price of a market is actually doing. There is no attempt to be right, on the contrary, mechanical system traders expect to be wrong most of the time. They focus on killing losses quickly and letting winners run to ensure profitability.