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Base rate neglect

Ignoring how common an outcome is in general and reasoning only from the specific story in front of you.

A base rate is the underlying frequency: how often breakouts follow through, how often a given pattern resolves up, what share of day traders are still funded after two years. Neglecting it means judging a case entirely on its own colourful details.

You see it whenever someone argues from an example. A breakout looks clean, so the fact that most breakouts in a chopping market fail gets no weight. A prop firm advertises payouts, so the share of accounts that never reach a payout never enters the conversation.

Base rates are boring and they are the strongest single input you have. Find the number first, then let the specifics move you off it a little, not a lot.

Related: representativeness-heuristic, survivorship-bias-in-advice, sample-size, availability-heuristic

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