Answer : This is Part 5. If you are new, refer Part 1, 2 , 3 & 4 for better understanding.
Step 10 : Develop an unbiased mindset. Why it is important? Let’s see how biases affect Person A’s trades.
Example 1 : Confirmation bias.
This happens when we believe what we want to see instead of the fact.
Person A is having view about the market and ignores all the signs the market give him. He goes long even though the market shows the signs of weakness in uptrend. This type of bias gives loss.
Example 2 : Recent bias.
This happens because of the recent happenings which make us to forget the past completely.
Person A had consistent profit for few days and he start to take all the trades with the expectation that it will give him profit only.
Another example is once the market fall continuously for 2 or 3 days, 4th day most traders start their trade with the expectation that the market will fall that day too.
Check whether your trades are influenced by your biased mind and start to see the real facts.