The Evidence
Confidence, Overconfidence, and How to Tell
Research separates three different things called overconfidence, and they barely move together. Which means you cannot answer the question by asking yourself.
6 min read
The archive
All articles
What has been measured about how traders decide, what a mistake is allowed to cost, and which of this field's favourite numbers survive being traced — newest first.
12 articles
Risk
Drawdown: What a Losing Run Does to Judgement
A losing run raises questions that cannot be answered from inside it. What the data says about persisting, and why a short sequence tells you so little.
6 min read
Mindset
Fear and Greed Are Not an Explanation
Two words account for everything and predict nothing. What has been measured about emotion and trading, and why a mechanism is more useful than a label.
5 min read
Risk
How Much to Risk Per Trade, and Why That Number
The one per cent rule is quoted everywhere and sourced nowhere. What the number has to be derived from, and what the regulatory limits actually tell you.
6 min read
Risk
Position Sizing When It Is Uncomfortable
The arithmetic of position sizing is trivial. The hard part is the four situations in which people override it, and each of those can be checked for in advance.
5 min read
Mindset
Revenge Trading: What Happens After a Loss
The hour after a loss is the most studied hour in trading behaviour. What the research found was not anger — it was whether the loss had been booked.
6 min read
Risk
Stop-Loss Discipline: The Decision You Make Early
Two different things are called a stop-loss, and research about one is quoted about the other. What was tested, and where the real decision sits.
5 min read
The Evidence
The Numbers This Industry Repeats Without Checking
We traced the most repeated statistics about trader losses back to their sources. One leads to a regulator's study of 14,799 accounts. One leads nowhere.
8 min read
Process
What a Trading Plan Has to Decide in Advance
Most trading plans are statements of intent, and intentions predict behaviour weakly. The psychology research is specific about the form that works instead.
5 min read
Process
What to Actually Record in a Trading Journal
Most trading journals record outcomes and feelings, which answer nothing. The fields that matter are written before the result is known, and there are not many.
5 min read
Mindset
What Trading Psychology Actually Means
The phrase covers four different subjects, and only some of them have evidence behind them. What has been measured about trader behaviour, and what has not.
7 min read
Mindset
Why Traders Overtrade, and What It Costs
Overtrading is usually described as an emotional failing. In the account data it is an arithmetic one, and the cost has been measured across two whole markets.
6 min read