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Anchoring Bias In Trading
In the financial markets, there is usually the tendency to rely on a single piece of information to make a trading or investment decision. In most cases, the buying and selling that takes place is anchored on a single piece of information, regardless of whether it needs to be updated or corrected. Such kind of behavior is often dubbed as anchoring bias. Anchoring bias is a behavior or tendency whereby traders place importance on the previous price or the first piece of information they receive to make decisions. As a result, the information is relied upon regardless of being correct or incorrect, often exposing ... (full story)