Atlas of Cognitive Biases #30 · Information and beliefs. Experts get it wrong too
What it looks like in trading
copying a well-known trader's levels without understanding them
believing TV analysts' forecasts
abandoning your own plan because “someone smarter says otherwise”
An example from a session
A well-known commentator predicts a crash. The trader closes a position that's in line with their plan, even though nothing in their data has changed. The same applies in the Club: my plans are educational material, not instructions (see the Rules).
What the research says
Stanley Milgram (1963): on the instruction of a person in a lab coat, 65% of participants gave (as they believed) the strongest electric shock to another human being. Philip Tetlock (2005) collected political and economic experts' forecasts for about 20 years: their accuracy was barely better than simple statistical rules.
Giving more weight to the opinions of people seen as authorities, even outside their area of expertise.
How does authority bias show up in trading?
Typical signs: copying a well-known trader's levels without understanding them; believing TV analysts' forecasts; abandoning your own plan because “someone smarter says otherwise”.
Educational content, not psychological advice or an investment recommendation.