Reference

Bias operating table

Sorted by severity. Use this as a quick operational lookup for triggers, market expression, diagnostics, and remediation lenses. This covers 20 researched biases so far and is not a complete list.

Bias	Operational Definition	Trigger Conditions	Market Expression	Cost	Diagnostic Markers	Case-Study Hook	Rebuild Lens	Severity
Confirmation Bias	Selective attention to supporting evidence	High-conviction positions, crowded narratives	One-sided research, dismissal of contrary data	Delayed exits, entrenched losses	Asymmetric language, justification loops	CPI contradicting inflation stance	Explicit counter-hypothesis	High
Anchoring	Fixation on initial reference point	First price, old forecasts, stale regimes	Clinging to obsolete levels	Mispriced risk, slow adaptation	Repeated target references	FOMC shift vs old rate expectations	Rebuild from zero	High
Overconfidence	Overstated accuracy	Winning streaks, strong recent PNL	Oversized positions	Convex losses, leverage misuse	Certainty language	USD strength leading to oversized longs	Probability calibration	High
Loss Aversion	Losses outweigh gains	Drawdowns, SL proximity	Holding losers, cutting winners	Skewed payoff distribution	Defensive wording	Refusing to close losing carry	Forward distribution focus	High
Sunk Cost	Persisting due to past effort	Long research, old theses	“It has to turn” mentality	Extended drawdowns	References to past work	Multi-month thesis post-invalid	Ignore historical expenditure	High
FOMO	Fear of missing upside	Fast rallies	Chasing late entries	Poor entry timing	Urgency language	Buying end-of-day melt-ups	Pre-defined entry criteria	High
Conservatism Bias	Underreacting to new data	Gradual regime shifts	Lagged positioning	Structural underperformance	Repetition of outdated views	Treating sticky inflation as transitory	Weight new data properly	High
Emotional Reasoning	Feelings treated as facts	Stress, fatigue	Reactive trades	Volatile decision quality	Emotion-heavy wording	Trading on geopolitical fear	Separate emotion log	High
Availability	Overweighting vivid/recent events	Vol spikes, crisis headlines	Overreaction to isolated data	Excess hedging, mistimed de-risking	Emotional recency cues	Single headline moving thesis	Check base-rate frequency	Medium
Recency	Overweighting latest outcomes	Trends, fresh reversals	Trend chasing, premature regime calls	Whipsaw losses	Short-horizon reasoning	Last sessions shaping thesis	Add long-horizon overlay	Medium
Disposition Effect	Selling winners, keeping losers	PNL framing	Early profit-taking	Lower expected return	“Bank gains” language	Cutting winners too early	Rule-based exits	Medium
Endowment Effect	Overvaluing owned trades	Long-held positions	Attachment to stale trades	Missed rotations	Ownership language	Old factor exposures	Value as if flat	Medium
Representativeness	Pattern-matching on superficial similarity	Historical analogues	Forced analogies	Wrong macro mapping	Overuse of historical labels	Misreading cycle analogues	Validate structural differences	Medium
Halo Effect	Single attribute shapes global judgment	Strong performers	Overrating assets/PMs	Concentration risk	Inflated praise	“This PM is always right”	Separate attributes	Medium
Regret Aversion	Avoid choices that may create regret	Missed trades	Inaction, hesitation	Opportunity loss	Regret-framed wording	Hesitating post-breakout	Expected value focus	Medium
Optimism Bias	Skew toward positive expectations	Bull markets	Underpricing risk	Downside underestimation	Simplistic positivity	Ignoring recession signals	Symmetric scenarios	Medium
Pessimism Bias	Skew toward negative expectations	Bear markets	Over-hedging, underexposure	Missed recoveries	Catastrophic framing	Selling into lows	Downside vs base case	Medium
Status Quo Bias	Preference for inaction	Stable markets	Avoiding needed rotation	Performance drag	“Let’s wait” language	Holding dead trades	Fresh-slate decisioning	Medium
Attribution Bias	Skill attribution for wins, external blame for losses	Volatile periods	Mislearning from outcomes	Process degradation	External-blame narratives	Blaming Fed for misses	Process-quality review	Low
Hindsight Bias	Events seem obvious after they occur	Post-data commentary	“I knew it” statements	Inflated future confidence	Backfitted reasoning	CPI surprises described as obvious	Pre-event probabilities	Low