Jack Jones

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What is confirmation bias in trading?

Confirmation bias is the tendency to interpret information in ways that confirm existing beliefs or positions. For example, a trader long EUR/USD may ignore bearish signals and only seek bullish news. This bias prevents objective decision-making and often leads to holding losing trades too long. Traders should counter it by seeking opposing viewpoints, using checklists, and sticking to clear rules. Objective analysis is essential for consistent results.