Understanding Trading Bias in Financial Markets

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Trading Bias,Financial Markets,Traders

This article explains the concept of trading bias in financial markets and how it affects traders' decision-making process. It discusses the factors that determine trading biases and their impact on market behavior.

Trading bias is a predisposition or perspective of the financial markets whereby traders believe there is a higher probability of a certain outcome as opposed to any other alternate possibilities. These trading biases are determined by technical and/or fundamental factors that support a specific outlook that explains market behaviour. This often relates to market trends being either bullish/bearish which signals appropriate. The end goal is to make good decisions with real money on the line.

There are so many decisions to be made on each trade that it can be overwhelming and can often lead to errors. For example, a trader needs to determine what market to trade, when to get in, how long to hold the trade, when to get out, and what trade size

 

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