Tag: confirmation bias

How extrapolation trips people up when trading

How extrapolation trips people up when trading

A trend is your friend, until the end.

One of the most common mistakes I see in newbies is trend following. Trend following is when you latch on to a pattern and extrapolate it. It could be a horse that is heavily drifting or coming in, perhaps a football team on a great run or form, or a poor one. Perhaps a team has had 20 games under 2.5 goals. Is there a trend, why, or this a natural aberration?…

27/10/2014 | By | Reply More
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