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Optimism bias

Expecting your own outcomes to beat the base rate, which is why every new trader knows the statistics and assumes they do not apply.

Most people rate themselves as above average and expect fewer than average bad events. It is a stable, well-measured bias and it is not fixed by being told the numbers.

This is why failure statistics about retail trading change so little. The reader accepts the figure and quietly files themselves in the exception group, usually on the strength of effort or intelligence, neither of which is the binding constraint.

Optimism is useful for persistence and dangerous for sizing. Let it drive how long you study; do not let it drive risk-per-trade, leverage, or how much of your savings enters the account.

Related: overconfidence, base-rate-neglect, planning-fallacy, dunning-kruger-effect

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