Tali Sharot: The Optimism Bias
Can you really make objective trading decisions when you have optimism bias?
There two things I like to highlight from this talk.
First, being more optimistic is important in achieving success. It gives you the motivation and persistency necessary to keep pushing forward. For some people, that drive comes from their passion in the things they do as explained by Sir Ken Robinson. Others need a reason to carry them forward, especially under adversities.
Second, opposite to the overall scheme of things, it is important to handle trading decisions dispassionately. Being too optimistic or too pessimistic will affect your ability to make proper trading decisions. Many traders can stay calm and objective for a short period of time but not for long. It is this ability to stay focus and free from emotional bias that often separate the good traders from the rest.
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