When it comes to Online Trading Smart Reviews, a lot of emotions affect traders. And one of these emotions is the so-called “action bias.”What is action bias? This is that moment when you feel like doing something even if that thing is not really necessary, let alone productive.It’s also like that feeling when we organize things, straighten up tools in the shed, or polishing something that doesn’t really need any of those measures.Basically, action bias makes us do something just to make us feel busy.This is an unhealthy habit for traders. Let’s dig deeper into this topic.
Action Bias in Day Trading
When you are day trading, you’re only spending mere seconds in placing orders and adjusting stop loss and target levels. You’re just trying to keep yourself busy the rest of the time.
For example, you trade two hours a day. You spend some seconds in placing orders. Then, you will just stare at it until something pops up. That leaves a lot of time to screw up your trade.
Obviously, action bias may ruin things for you just because you’re trying to battle idleness. Now, what you need is a solid discipline that will let you control your urges. In other words, you have to teach yourself to do nothing until it’s necessary.
Unsuccessful traders typically feel that they have to do something, merely to compensate for their lack of success. They feel that they need to be involved in the money-making process, usually leading to impulsive and illogical decisions.
Why It’s Hard to Trade
Many day traders are active, and many of them can make 8 to 10 trades. FSMsmart Online Trading becomes hard because they need to act only when their strategies allow them to.
While strategies vary from trader to trader, the main point worthy of reiterating is that you should act at the right time. Timing is key, and its worst enemy is action bias. That’s why it’s important to fight it.
How to Fight Action Bias
The best way to fight this kind of bias is to have a plan, a strategy, a solid course of action—and strictly follow it. Keep in mind that doing nothing at all is better than ruining your trades and your plans.
Act only if it’s what your plan requires you to do. Remember that the market is infinitely tricky, and one mistake can be the trigger for a domino effect that ends up with you being a mere blip on the radar. In the real world, looking like you’re always busy seems to be helpful, though stressful. But in the world of trading, that’s not true.
If you think it will help you, try trading in a demo account and build strong discipline. try to endure long hours of doing nothing and just watching your trades, waiting until your strategy allows you to do something.
And remember, honing your discipline does not take hours or days. Sometimes, it takes months and years before you get a really good grip.