Chapter 9
Untangling Decision-Making's Hidden Path
IN THIS CHAPTER
Seeing how cognitive biases distort reality
Avoiding information overload
Working with storytelling
Navigating media coverage
Perception is a tricky thing. In Chapters 2 and 5, I talk a bit about how we humans construct our own reality and how subjective and biased our individual point of view actually is. This chapter is more about our perceptual skills. Here you'll discover that your personal perception of financial markets is often quite biased and easily influenced — involuntarily and unintentionally, to be sure. This does help to prove my contention, however, that human decision-making processes are inherently susceptible to failure. For you to be able to make good, reliable trading decisions, you must understand the implications of letting cognitive biases, emotionally-laden stories, and information overload affect your trading behavior.
Recognizing Systematic Perceptual Disorders
Do you know how human decision-making processes occur? I imagine it as follows: You collect information from a variety of sources. ...
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