Overconfidence — Trading Ideas on TradingView

Why Traders Lose Focus After Winning Streaks Winning streaks are dangerous. They make you feel in control. You stop thinking in probabilities and start thinking in outcomes. That shift ends most profitable runs. After several wins, your brain links confidence with success. You assume the next trade will also work. You increase risk, ignore signals, and force setups that do not fit your plan. This is not trading. It is gambling with momentum. Your goal is not to feel good. Your goal is to execute a repeatable process. Follow these steps: • Keep your position size fixed for a set number of trades. This prevents emotional scaling. • Log every trade with entry, exit, and reason. Review data, not emotions. • Take one day off after three or more wins. It resets focus and stops greed loops. • Set rules for re-entry after a big win. Do not revenge trade the market in reverse. • Use alerts instead of constant chart watching. It reduces impulsive entries. Example: A trader wins five trades in a row. Balance rises from $10,000 to $11,500. He increases size from $1,000 per trade to $2,000. The next trade hits stop loss. He loses $400 instead of $200. Confidence drops, he forces a recovery trade, loses again. The account returns to $10,700. Three days of progress lost to one emotional decision. The fix is mechanical execution. Do not scale until data shows consistency across at least 30 trades. Use statistics to guide size, not emotion. Focus on staying neutral. Your job is to follow process under pressure. Discipline after wins separates traders from gamblers.

The Billy Big Balls Moment A trader reached out to me by direct message here on Trading View highlighting a challenge that many of us face from time to time. We’re talking about self sabotage. That moment you know what to do - but do something entirely different and get a result that frustrates the **** out of you. Follow along, I hope this helps. BUT FIRST NOTE – This is a post on mindset and emotion. It’s not a trade idea or strategy designed to make you money. My intention is to help you preserve your capital, focus, and composure so you can trade your own system with calm and confidence. Here's a scenario you might be familiar with... You nail a sequence of trades. Precision. Flow. Everything lines up. And then something flips. You start pushing harder, sizing up, breaking your own rules. A few minutes later, you’re staring at a screen wondering, “What the hell just happened?” It’s not lack of discipline nor is it a technical problem. You have an emotional pattern that hasn’t been mapped out yet. This pattern has roots into your subconscious and it’s sabotaging your efforts. WHATS REALLY HAPPENING AND WHERE DOES THE DRIVER REALLY COME FROM When you start winning, your brain gets flooded with dopamine , the chemical of reward and anticipation. If your nervous system has ever learned that success leads to loss, losing control, losing safety, losing connection it quietly associates “winning” with risk . The mind says, “Let’s keep this going.” Deeper down though is the silent warning … “This isn’t safe.” Doesn’t sound logical right? It’s not. It’s emotional. Deeply embedded in your psyche and activated whenever the mind feels that familiar feeling again. The mind wants to go forward - the body wants to intervene. And so you get an internal split. A moment of pressure that your mind just has to resolve. And the fastest way the subconscious knows to relieve that pressure… is to end the win. So you do something impulsive, not because you want to fail, but because deep down, you're trying to protect yourself or believe or not, you might be even trying to punish yourself. Weird stuff happens in the subconscious. That’s why the sabotage happens right after a run of success. It’s not logic breaking down. It’s the mind trying to restore an emotional equilibrium. HOW TO CATCH IT BEFORE IT HAPPENS Listen. The moment you size up impulsively is not random. It’s a repeatable signal that your emotional system has been triggered. You can’t fix what you can’t see - so start tracking it. 1. Notice your signature cue. For some, it’s tension in the chest or a fidgety feeling of restlessness. For others, it’s the need to “just check one more chart.” For you it might be something else. Pay attention and start to become aware of what comes up for you. 2. Map the pattern Keep a short log : what happens right before you go rogue? Notice the time of day, physical tension, thoughts. You are looking for a repeatable sequence. 3. Identify your threshold There’s always a tipping point where clarity narrows: your breath shortens, attention tunnels or you start fantasising about bigger gains. That’s your signal. 4. Interrupt the pattern and create a recovery plan (as you notice the cues) Physically step away from the desk. Exhale through the mouth long, slow, 6 seconds. Let your eyes rest on something still . This shifts the nervous system out of fight-or-flight and back into focus. This isn’t about controlling emotion. Its about expanding your capacity so emotion doesn't control you. Next time you’re on a hot streak, notice where focus ends and thrill begins. That’s the edge that makes or breaks the run.

Sailing Smooth in Forex: 3 Hazards to Abandon" 🚢💹🔐 In the vast sea of forex trading, success often hinges on what you let go of rather than what you acquire. Overtrading, overrisking, and overconfidence are like treacherous waves that can capsize your trading ship. In this article, we'll explore these three perilous habits and explain why you must bid them farewell for a safer and more profitable voyage in the world of forex. 1. Overtrading: The Temptation to Sail Too Often Overtrading occurs when traders execute an excessive number of trades, often beyond their risk tolerance or strategy capacity. 2. Overrisking: The Peril of Excessive Exposure Overrisking involves allocating too much of your capital to a single trade, disregarding prudent risk management. 3. Overconfidence: The Siren's Call Overconfidence can lead traders to believe they are infallible, causing them to neglect due diligence and risk management. In the unpredictable waters of forex trading, success requires abandoning the hazardous habits of overtrading, overrisking, and overconfidence. By recognizing and addressing these tendencies, you can set a course for safer and more profitable trading. Remember, a disciplined and calculated approach is the lighthouse that guides you through the fog of trading uncertainties. 🚢💹🔐 Do you like this post? Do you want more articles like that?

Overconfidence Bias Causes of overconfidence bias In order to define overconfidence bias, it is important to understand some of the causes. These could include: Doubt avoidance. Very often, people don’t like moments of ambiguity or doubt. Overconfidence could work as a solution, with the overconfident person feeling confident in their abilities to feel sure, even in a situation where they should feel doubtful. Inconsistency avoidance. A lot of the time, people search for consistency when it comes to new ideas. There is a tendency to search for a link between previously held beliefs and new ones. This may lead people to hold onto their old ideas, even if new evidence contradicts them. The endowment effect. This phenomenon is where people overvalue things purely because they own them and could feed back into overconfidence. Hindsight bias. Hindsight bias, the false belief that they saw something happening before it happened when they didn’t could lead to overconfidence. Incentives. Sometimes, the higher an incentive someone has for doing something, the more determined they are to do it. This could make them believe they have made the right judgments and have the skills to get it done, even when they don’t. Types of overconfidence bias Overconfidence can come in various forms, including: Illusion of control: This type of overconfidence bias refers to the belief that someone has more control over a situation than they do. In trading, it could lead to traders believing they can control the market when they can’t. Over ranking: This refers to the belief that someone is more talented than they actually are. This is common because no one wants to believe they are below average. In trading, this could lead to traders making trades based on overly optimistic forecasts, culminating in potential losses. Timing optimism: This is when someone incorrectly thinks they could do work far quicker than they can. This relates to trading when traders believe a trade or investment would pay off far faster than it could. Desirability effect: Perhaps better known as wishful thinking, this is when someone thinks that something will happen just because they want it to happen. Overconfidence bias examples These are some hypothetical cases where trades could go wrong because traders have fallen victim to the overconfidence effect: Believing an asset’s price will continue moving in the same direction – An example of overconfidence bias in trading is when a trader believes an asset will continue to move in a way that benefits them, despite receiving negative news or signals. Suppose a trader made a profit when going long on a contract for difference (CFD) on Amazon (AMZN) shares. They now feel confident the price will likely continue rising, leading them to hold onto the position for too long, meaning there are significant losses when its price trajectory changes. Ignoring risk – Overconfidence could lead traders to ignore potential risks associated with an investment. For example, they may miss the risk associated with a particular sector or industry and trade it heavily. This could lead to significant losses if the sector or industry experiences a market correction. Overtrading Overconfidence bias could make traders believe they may make quick profits through frequent trading. They may take more risks than they should and trade too frequently, leading to high transaction costs and lower returns. Overtrading could also lead to a lack of trading discipline and increased susceptibility to making mistakes. Failing to consider alternative viewpoints Overconfidence bias may be linked to confirmation bias, where people seek information supporting their beliefs while ignoring information contradicting them. This could result in traders ignoring or missing important information and making decisions based on incomplete or inaccurate information, potentially leading to losses. How to counteract overconfidence bias There are ways people can consider if they want to overcome and counteract overconfidence bias. These could include: Acknowledging it. Knowing that overconfidence exists could be the first step in tackling it. Being realistic. Understanding that you do not always make the best decisions all the time could help guard against overconfidence bias. Researching the market. Knowing that markets can do unexpected things very often could help someone understand the consequences of overconfidence. Keeping a note of trades. A trader who records their trades could look over them, see where they went wrong, and gain a perspective that could prevent overconfidence bias. Being diligent. Doing their research and trying to make trades based on facts rather than emotions, coupled with regularly checking and updating their trading strategies, could help stop someone from suffering overconfidence. Conclusion A simple overconfidence bias definition is the tendency to overestimate one’s abilities, knowledge, or judgement that could lead to excessive confidence and risk-taking and result in significant losses. Traders and investors should be aware of the different types of overconfidence and take steps to avoid them, such as seeking out diverse sources of information, avoiding making trades based on emotions, and regularly reassessing their investment strategies. By doing so, traders could minimise the risk of overconfidence bias and make more informed trading decisions.

♦️BAD MINDSET IS YOUR ENEMY♦️ ♦️Forex trading is one of the most exciting and lucrative ventures that anyone can undertake. With the right mindset and tools, one can make a lot of money by trading currencies. However, the opposite is also true. A bad mindset can lead to disastrous consequences in forex trading. It is, therefore, important for traders to understand the effects of a bad mindset and avoid them at all costs. ♦️One of the most common effects of a bad mindset in forex trading is overthinking. When traders overthink, they become too analytical and too cautious. This can lead to missed opportunities and bad trading decisions. Overthinking can also lead to indecision and second-guessing, which can be harmful in a fast-paced and dynamic market like forex. ♦️Another effect of a bad mindset is emotional trading. Emotions like fear, greed, and impatience can lead to irrational trading decisions. For example, a trader may hold onto a losing position for too long in the hope that it will eventually turn profitable. This can lead to bigger losses and a further deterioration of the trader’s mindset. Similarly, greed can lead to taking on too much risk, which can also lead to disastrous consequences. ♦️A bad mindset can also cause traders to be too dependent on their trading strategies. While having a good trading strategy is important, it is equally important to be flexible and open-minded. A trader who is too reliant on their strategy may miss out on profitable opportunities that do not fit their style. This can lead to missed profits and frustration. ♦️Lastly, a bad mindset can lead to overconfidence. Traders who are overconfident may take on too much risk or ignore important market signals. This can lead to catastrophic losses and a severe blow to the trader’s ego. Overconfidence can also lead to ignoring basic risk management principles, which is a recipe for disaster. ♦️In conclusion, a bad mindset can have a significant impact on forex trading success. Traders who are too analytical, too emotional, too dependent, or too overconfident may make bad trading decisions that can result in losses. It is, therefore, important for traders to stay calm, flexible, and open-minded in their approach to forex trading. A winning mindset can help traders achieve success and make profitable trades in the dynamic and exciting forex market. Thanks for reading bro, you are the best☺️ Like, comment and subscribe to boost your trading! Dear followers, let me know, what topic interests you for new educational posts?