Good morning, traders…

A few years back, I made a bet during March Madness.

I didn’t bet on this team based on their record, play style, or statistics. 

I just liked the coach. 

The guy gave great interviews. He was calm, confident, and said all the right things. 

He felt like a winner.

So I filled out my bracket, pushed them to the Final Four, and even sprinkled in a little side bet. 

Never mind their weak shooting percentage or questionable team chemistry…

I wanted them to win, so I searched for reasons to believe they would. 

They lost by 18 points in the first round.

Why did I make such a dumb bet? Because of a psychological phenomenon known as confirmation bias. 

I see it all the time in trading. 

You buy a call option, then scroll through charts, social media, and news sites, soaking up anything that confirms your thesis. 

Meanwhile, you ignore the double top and the weak volume. You brush off the obvious counterpoints. 

You already made your bet. Now you want the idea confirmed. 

That’s how confirmation bias becomes the silent killer of traders. 

If you don’t learn to avoid it, it can wreck your account (just like it wrecked my March Madness bet). 

Let’s Erase Confirmation Bias From Your Brain…

The Danger of Having Your Bias “Confirmed”

Confirmation bias influences you to seek out information that proves you right (and ignore any that proves you wrong). 

It shows up in sneaky ways…

You might skip past the data that doesn’t match your thesis. Or you only check the news from bullish sources. Or move your stop-loss lower because “this trade is different.”

You feel like you’re doing due diligence. But really, you’re hearing what you want to hear. 

When money’s on the line, our brains start filtering for the outcomes that would lead to a win. 

We highlight bullish news and ignore bearish sentiment. We cheer on the tiniest move in the 5-minute chart and rationalize the major technical break on the daily. 

All because we want to win. When, ironically, that exact cycle leads to losses.

To make matters worse, confirmation bias is exacerbated when we size up. The more we risk, the more we want the world to confirm we made the right call. 

We cling to our original idea because the alternative (admitting we were wrong and taking a loss) is uncomfortable.

But if you’re only looking for reasons to hold your trade, you’re not being objective. You’re campaigning. 

It’s like being the press secretary for your trade when you really want to be the journalist challenging the position. 

Consistent, successful trading requires honesty with the chart, with your plan, and most importantly, with yourself.

3 Ways to Kill Confirmation Bias Before It Kills Your Trades

Here are three ways to eliminate confirmation bias from your mindset…

Take the Other Side

Before you enter a trade, argue the other side. Write it out. Say it out loud. 

Make the bear case stronger than the bull case. This protects you from falling in love with your position.

If you can’t explain the downside risk, you don’t understand the trade.

And don’t cheat. Don’t make a straw man bear case just to knock it down. 

Build the strongest possible argument against your idea, like a high school debate practice. 

If your idea holds up against honest scrutiny, it’s probably the real deal. 

Use “If/Then” Rules

Create “if/then” rules ahead of time. 

“If the share price drops below $540, then I sell.” 

Not “I’ll wait and see,” which really means, “I don’t want to admit I’m wrong.”

Make your rules mechanical. Not emotional. This forces your future self to act on logic, not pride.

Make rules for entries as well. “If IV is over 100%, I won’t enter.”

The more objective your entry is, the less likely you are to force a trade just because it feels 

right.

“If/then rules” act like bumpers in a bowling lane. They keep you from drifting too far into danger just because the ball looked good out of your hand.

Ask Someone Who Disagrees

Find a trading peer who sees things differently from you. 

Show them your setup. Ask what you’re missing. 

If they’re observant (and honest), they’ll point out what you’re blind to.

Make sure it’s someone who’s not afraid to be blunt. You don’t want a cheerleader. You want a skeptic.

If you’re trading solo, use a checklist. Build in questions that challenge your idea:

• What’s the worst-case scenario? 
• What does the chart look like if I flip it upside down? 
• What would make me change my mind today?

Accountability is the antidote to confirmation bias. 

You’re here to collect the evidence, weigh it, and make the best call based on verified data.

Trade like a judge. Treat every setup like a witness. 

Let the facts speak louder than your feelings. 

Happy trading,

Ben Sturgill

*Past performance does not indicate future results