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Adaptability is the most dangerous psychological bias in traders

Adaptability is the most dangerous psychological bias in traders

When people are confronted with new information that contradicts their previous perceptions, they often feel a kind of mental distress, which is actually a psychological phenomenon and is called adaptation. “Cognition” in psychology includes attitudes, feelings, beliefs, or values; adaptation is a state of imbalance that occurs when conflicting cognitions collide.


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Adaptation is in fact a response that takes the form of conflict and an attempt to reconcile contradictions, resulting in mental distress. For example, suppose a consumer buys a small personal computer, thinking it is the best product on the market. But when he acquires a new knowledge that introduces another device as the best product, the person encounters an imbalance, followed by a kind of incompatibility that alleviates this discomfort to some extent. The person begins to delve deeper into convincing himself that the computer he has bought is better than the one he has heard about, thereby trying to alleviate his mental discomfort and dissatisfaction with the purchase he has made. Give.

Technical description of adaptation

Psychologists believe that people often resort to inaccessible justifications and reasoning, in order to harmonize their perceptions and cognitions and maintain their psychological stability. In this process, they make reforms (actions) that are not always in their favor, logically and rationally.

When people find themselves in situations where they have to choose between several options, there is a conflict in decision making. A commitment that reflects an individual’s emotional attachment to the decision he or she has made is always ahead of the advent of adaptation. If existing facts challenge a person’s emotional attachment, it has a kind of threatening emotional impact. Most people try to avoid inappropriate situations, and in this way, to avoid psychological conflict, they ignore the relevant information. Theorists have identified two different aspects of adaptation in decision making.

Selective perception

People with this trait only pay attention to information that follows the pre-selected method, and this creates an incomplete or incorrect view of the existing reality. These people are not able to understand the available evidence completely objectively and are therefore prone to make mistakes in their calculations.

Selective decision making

Selective decision-making occurs when a person is highly dependent on a particular way of making decisions. Selective decision-making provides justifications that are heartbreaking in a particular way tomorrow, even if it imposes heavy economic costs on him. For example, one may continue to invest in a project that now has unpleasant prospects, simply to avoid wasting the funds invested so far. Many studies have shown that people are mentally inclined to support their decisions.


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