Confirmation bias appears when we give more weight to information that supports an existing idea and discount evidence that contradicts it. In trading it can affect both entry and trade management.
Before entry
One way to reduce it is to write down not only why the trade is valid but also what would invalidate it. If you record only supporting arguments, the review is incomplete.
During the trade
Watch for changing targets, stops or interpretation of context to keep a thesis alive after it no longer meets your rules. Recording the reason for every change helps separate planned adaptation from post-hoc justification.
After closing
Review trades where you ignored contradictory information or changed a rule. The final outcome is not enough; the question is whether the decision process remained consistent.
Useful journal questions
- What condition would have invalidated the entry?
- Did that condition appear?
- Did I change the stop or target afterwards?
- Did I find a new reason to keep the trade open?
- Would I make the same decision if I did not already have a position?
Compare exceptions
Tag trades where you changed a rule to preserve the thesis and compare them with trades that respected the original invalidation. The aim is to measure the actual cost or benefit of those exceptions.