Why it matters
It turns trading into defending a story instead of updating a hypothesis.
Operational use: this is how the market taxes urgency. When it appears, slow down or size down.
Common trap
Consuming only sources that agree with your position while ignoring invalidation signals.
Example
A trade moves against you; you find more bullish opinions instead of reducing exposure.
Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.
Notes
Confirmation bias is why narratives become identity. In trading, identity is expensive.
Quick rule
- If you see this repeatedly, you are in a different regime than your model assumes.
- Regime change usually means position size change.
- When in doubt: trade smaller, or don’t trade.