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Looking for evidence in favour of your own position — and one way to avoid it
Published by The Retail Trader · AUG 09, 2026 · Trading Psychology
Something strange happens after you take a position: every piece of news starts to look like it supports that position. The opposite news either goes unnoticed, or becomes 'the market has not understood yet'. This is called confirmation bias.
The moment you take a position, that view becomes part of your identity. Now information against it is not just a data point — it feels like a personal challenge.
So the mind picks out, one by one, the things that support the view, and gives less weight to the rest. This is not done deliberately, and that is exactly what makes it dangerous.
You follow the people whose thinking matches yours, and the algorithm shows you whatever you stop to look at. The result is that you feel 'everyone is saying this' — when you had only chosen to listen to one side.
A good habit: deliberately look for the best argument against your view, and look for it from a thoughtful person, not from a troll.
Before taking a position, write this down:
• If this trade turns out wrong, what will be the most likely reason?
• Which news or which level will force me to change my view?
• What will I do in that situation — decided in advance, now.
• What data do I still not have, and where will I find it?
The benefit of writing these four lines is that you have written your exit condition beforehand — and later it becomes much easier to follow, because you wrote it yourself with a calm mind.
On every big position, read at least one report or analysis that says the opposite of what you think. If your view is still the same after reading it, it is now stronger — because it has been tested.
And if reading it makes you uncomfortable, that may well have been the most worthwhile thing to read.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.