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Editor’s Note: Dr. Van Tharp’s content is timeless and our goal is to continue to share his material with our readers. Today’s tip is material from a past article. So far in this series, we have looked at biases regarding randomness, which is the tendency people have to seek out patterns where none exist and to invent the existence of unjustified causal relationships. Because people attempt to understand and make order out of the market, they assume that the longer a trend continues, the more likely it will suddenly turn […]

Editor’s Note: Dr. Van Tharp’s content is timeless and our goal is to continue to share his material with our readers. Today’s tip is material from a past article series. Last month we looked at the randomness bias, which is the tendency people have to seek patterns where none exist and to invent the existence of unjustified causal relationships. Because people attempt to understand and make order out of the market, they assume that the longer a trend continues, the more likely it will suddenly turn around. This manifests into