The term “illusion of control” appeared in the articles on psychology not so long ago – 40-50 years ago. Such a problem really exists in the life of most people. Many of us believe that they can control everything. But if you think well, the erroneousness of this statement becomes understood. In fact, we can not control little. Our possibilities are only in reaction to what is happening. The revaluation of his role in one situation leads to negative consequences. This concerns different areas of life and Human activity, including trading. The illusion of control in the market is dangerous for the trader. It reduces the efficiency of trading decisions and, as a result, worsens the results of trade. Let’s talk about this in more detail.

The causes of the illusion of control

of such reasons may be much. But I will call the main of them. The illusion of control leads the inability of a person to objectively assess the situation. It cannot determine the boundaries of its capabilities. His self-esteem exceeds Real level, sometimes significantly. The second reason is a very high interest in a positive outcome of a particular situation. Well, finally, the third reason. It lies in the misunderstanding of the existing relationship between the actions that the person performs and the results obtained. These causes are enhanced under the influence of a number of factors. These include such qualities as pride, self-confidence and excessive optimism. In addition, if the situation is repeated, then the person seems to He has everything under control. He knows how everything will happen, and what to do.

Errors of traders under the influence of the illusion of control

traders who fall into the trap of the illusion of control are beginning to make trading solutions with increased risk levels. They trade even when the market situation is too uncertain and requires pause. Such traders are trying to “take revenge” the market for the fact that he did not meet expectations. They believe that this is in their power. Trade Reduction Rules Risks traders ignore because they believe that they will always be able to accept operational solutions if necessary. Traders are looking for trading systems that have very complex conditions. It seems to them that only such TCs allow you to fully monitor the market situation. Influenced by the illusion of control, traders overestimate the role in trading tools for analyzing the market, analytics and forecasts. The illusion of control inflicts damage to the deposits of many traders. To avoid this, you must initially Understand the simple truth. The trader cannot control the market. It can only take measures to minimize possible losses and increasing the chance of profit. Inga Fedorova 20.11.2021 Record Illusion Control. Why she is dangerous for a trader. For the first time appeared .