We all have certain biases when trading that affect our trading without us usually realizing it. I have spent quite a while researching these biases and I have found that when teaching retail traders some of the biases they exhibit are ones that I have not seen in the professional world.
One is the long bias, which means that there are many retail investors who prefer to go long. If you are doing short-term trading, entering and exiting multiple times a day, or if you hold a trade for one or two days, going long is just as important as going short, and there are trading opportunities for both. If you exclude short trades, you will only limit your trading opportunities and may also make trades that you should not make.
To give you an example of what I've seen over the past few weeks, as cryptocurrencies have steadily fallen, a question I've been asked a lot in the internal community is "is it a good time to go long now?" Now think about it for yourself, would you ask this question? It's the wrong question and a sign of bias.
As a trader, the question you should ask yourself every day is "What is the right trade today?" Then, starting from this question, explore long and short trading strategies and determine which one is correct. When you ask the question "Can I go long?", you have ruled out the possibility of shorting, so if you have this kind of behavior, you may have a long bias. Please check your trading statistics to see if the number of long orders is much higher than the short orders, which is also a sign that you may have a long bias. This is one of the most common biases I have seen in the market. In the professional industry, we are equally comfortable with shorting and longing. Of course, I do not deny that the risk of shorting is slightly greater than that of going long, which is why many retail investors are afraid of shorting. But if you have a model like ours, you can go for the swings with confidence. The following figure is the signal given by our internal model
Then those who have the model can open orders according to the signal of the model to complete the swing trading. Although ZRO is only one step away from our entry price, we have already gained more than twice the entry price through the swing trading these days. The model is published on the tradingview platform, and the article a few days ago also explained it.
There are many biases in trading that need to be understood. If you want to learn more about trading psychology and want to overcome them, or want to understand models, you can follow me to learn.