Dr. Van K. Tharp, Ph.D.

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

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. At any given instant, over two billion bits of information impinge upon your senses. Yet consciously, we can only process “7 +or – 2 chunks” of information. This tremendous reduction in the information necessary to act upon external signals or make decisions is accomplished through various “heuristic” rules or shortcuts. These rules, which are essential if you are to make any