Common decision biases
- FOMO: entering because price moved without you.
- Revenge trading: increasing activity after a loss.
- Confirmation bias: only noticing evidence that supports an existing view.
- Loss aversion: refusing to accept a predefined invalidation.
Process over outcome
A good decision can still lose and a bad decision can still win. Reviewing the quality of the process helps prevent one lucky outcome from reinforcing poor behavior.
What to journal
- Why the setup qualified.
- What would invalidate it.
- Whether execution matched the plan.
- Emotional state before and after the trade.
- What should be repeated or removed.
Using automation wisely
Automation can reduce impulsive execution, but it does not eliminate model risk, data problems, broker issues or bad assumptions. Human review is still useful for system health and exceptional conditions.