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1/28/14

A good Kid Dynamite post on trading and confirmation bias

It's right here and this is the central message...

"..if "I could give new traders a single piece of advice, it would be: “try to figure out what the guy on the other side of the trade is thinking.”   If you’re bullish and you know the bear thesis, it should either help you change your mind because you realize that you’re wrong, or give you confidence that the other side is wrong.  Either way, hearing someone voice sentiments on the other side of a trade shouldn’t make you mad.   If you are the guy on the message boards typing “GO AWAY SHORTY” every time someone mentions that your thesis may not be based in reality, you need help, fast.
...but you'd be very well served to click through and read the whole thing, as context and explanations help ram the point home. It also reminded me of the reasons there is no longer a comments section at this humble corner of cyberspace, which can be boiled down to 1) I'm not as nice as KD and 2) market dumbasses drive me mental.