Overconfidence Bias
Systematically overestimating the accuracy of your analysis, the reliability of your edge, or your ability to control trade outcomes.
Overconfidence bias is the tendency to believe your predictions are more accurate and your edge more durable than the evidence warrants. It is the most common bias among experienced traders who have had a good run — and one of the most expensive.
It shows up as: sizing too large relative to account and volatility, ignoring stops because "I know this trade is right," trading instruments outside your verified competency, and dismissing risk management as unnecessary given your "read" on the market.
Markets are fundamentally uncertain. The best traders carry a deep respect for that uncertainty — they are confident in their process while staying humble about any single outcome. Overconfidence confuses the two.