To become a first-class trader, You need to be clear about your own limitations.. But most novice traders don't know this.. For example, behavioral economist Dr. Terrance Odean revealed, that internet investors seek to trade outside of their experience. They don't have an exact picture, what can they, and what can't they do. This distorted exaggeration of ability is not unique to traders.. This is a widespread phenomenon.. Research shows, what, when you try to rate, how good is your newbie trader activity, it's better not to trust your intuition.
Dr. David Dunning (Dr. David Dunning) with colleagues (2003) in a recent article in “Current Trends in Psychological Science” (Current Directions in Psychological Science) proves, that most people “blissfully unaware of their incompetence”. This tendency to overestimate one's ability has been noted in several studies.. When people are asked to take an aptitude test, type of logical thinking or grammatical errors, they, usually, rate their work too highly: they think, that their result is much above average (60 % and higher), although in fact it does not exceed 25 %. This reassessment is not limited to tests.. People tend to overestimate their work in a wide variety of areas.. Hunters count, what do they know more about firearms, what turns out to be in reality, and doctors think, what do they know more, how to accurately diagnose patients, than really. Tests have shown even, what, when people are offered money for an accurate assessment of their work, they still can't do it.
Dr. Dunning and his colleagues believe, that bad performers are doubly punished. Little of, that they do not work well, but they also lack the psychological ability to feel, what are they doing bad. So what makes them different from good performers?? Bad workers start with the belief, what they – “good performers”, and are in no hurry to develop a method for evaluating their work. good workers, against, try to objectively measure their work accurately and avoid worrying about, “good ones” are they or not. Really, studies show, that they actually underestimate their work. When they see someone else's results, surprises them, how well they did compared to others.
Fortunately, bad workers are not doomed to stay at the bottom. In his experiments, Dr. Dunning showed, what, when bad performers are shown, how bad they work, and give instructions, how to improve their skills, their results improve and they evaluate their work more accurately. These studies suggest a way, which a novice trader can improve their achievements. Primarily, need to know, that the intuitive estimate would be grossly overstated, and take active action, to get over it. Secondly, you need to create an objective measure of your trading results, like a trader's diary, so, so you know for sure, how well are you trading. Thirdly, improve your knowledge level. To the extent, how experience will grow, the assessment of your work will become more accurate. Remember it. An objective and accurate assessment of your ability is vital to successful trading..
