Trading obstacles: Overconfidence
Self-confidence is one of the most important feelings that helps a person progress and achieve in life. Just as a lack of self-confidence harms a person as he refrains from many good actions and decisions, so too much self-confidence may push a person to actions and decisions characterized by recklessness...
The feeling of confidence may be the result of the trader encountering success in more than one consecutive trade, and this makes him think that he has become invincible...or he blindly trusts his method of trading.
It may happen that one of the deals is identical in its terms to many of the deals that he won before in terms of technical and fundamental aspects of strength, which also reinforces his excessive confidence in his method or that deal. Confidence is often based on what is called hindsight, where the trader believes that he knew the direction of the deal and that he wanted to enter it, after the deal had actually taken a certain direction. With the repetition of this false feeling, the trader’s self-confidence increases, and with it his audacity to make inappropriate decisions increases. Thoughtful.
Mistakes made by a trader due to overconfidence
Overconfidence may lead a person to be reckless and not follow his plan or strategy.
Confidence in the strategy or analysis of the deal often prompts the trader to double contracts
And trigger the stop loss or trade without it.