William Garcia#76
What is recency bias in trading?
Recency bias makes traders overweight recent results compared to long-term performance. For example, after a winning streak, traders may increase risk unrealistically, or after a losing streak, they may abandon a solid strategy. Recency bias creates inconsistency and poor discipline. Keeping detailed trading journals, analyzing long-term statistics, and avoiding impulsive changes help mitigate this bias.
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